Government entities have received almost half of the money paid so far through a new program to subsidize health insurance for early retirees according to a new report from Goverment Accountability Office (GAO), creating the possibility that health insurance plans for unionized workers may ultimately benefit from such disbursements.
The Early Retiree Reinsurance Program (ERRP), created through Obamacare to fund health insurance for early retirees too young for Medicare, has disbursed $2.7 billion of its $5 billion appropriation, with 45.5 percent going to programs classified as “government entities.” The remaining money went to four other kinds of groups: commercial organizations (36.6 percent), non-profit organizations (15.2 percent), religious organizations (0.1 percent), and unions (2.6 percent).
Because “plan sponsors were not provided guidelines” on how to categorize their application, GAO Health Care director John Dicken explained, “it is therefore possible that simiar types of organizations may have categorized themselves differently.” In particular, the report indicated that unions might have received more than the 2.6 percent in disbursements than applications indicate.
“A plan’s sponsor’s categorization may not reflect the type of retirees covered by the plan sponsor’s health plans,” wrote Dicken, “For example, unionized retirees may participate in a health plan that is sponsored by a government entity or nonprofit organization.”
The United Autoworkers (UAW) insurance program received $206 million, more than any than any other single entity, The Washington Examiner’s Byron York reported in March. The California Public Employees Retirement System (CalPERS), famous for giving out thousands of pensions in excess of $100,000 to retired government workers, rivaled the UAW haul. The agency expected to receive $200 million through ERRP.
The ERRP subsidizes insurance plans already receiving other government funding. “Many plan sponsors who were likely to be eligible to participate in ERRP were already participating in the Retiree Drug Subsidy (RDS) program,” Dicken noted, “and were therefore aware of ERRP in advance of specific outreach [from the government].”
