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Health reform’s silent fans

By Jay MacDonald · Bankrate.com
Friday, April 8, 2011
Posted: 9 am ET

For thousands of early retirees, health care reform has already proven invaluable. Without the Affordable Care Act's provision that has reimbursed their former employers $1.8 billion since last June, they'd be looking -- largely in vain -- for affordable health insurance in their 50s or early 60s.

Though it receives little attention in this highly-politicized debate, the Early Retiree Reinsurance Program provision of health care reform has served as a safety net for early retirees who have been dropped from their employer's health insurance program before they're old enough to qualify for Medicare.

To date, 5,000 public and private employers nationwide have signed up for the program. When a covered early retiree runs up between $15,000 and $90,000 in medical bills, the participating employer can be reimbursed through the program for most medical, surgical, hospital and prescription costs.

The coverage became necessary as soaring health insurance costs prompted many employers to drop coverage for early retirees. According to the Kaiser Foundation, only 28 percent of large companies now insure retirees, compared to 66 percent just 20 years ago.

The term "early retiree" can be misleading. Some folks in this category may wish to work until 65 but are physically unable to do so; others who have been downsized find it hard to find another job with full benefits.

Faced with steep premiums for individual coverage, many opt to go without. According to studies, that's a move that drives Medicare costs higher than if their illnesses had been treated earlier.

Opponents to health care reform call the Early Retiree Reinsurance Program a taxpayer subsidy to private companies. Advocates, including AARP, praise the coverage.

What's your take? Is this a calculated corporate giveaway or a compassionate act to rescue Americans who otherwise might forfeit a lifetime of savings to their first health crisis?

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3 Comments
Shantique
April 11, 2011 at 8:52 am

I'm not really feeling bad for "early retirees" even if you want to claim that "many" of them are physically unable to work and yes there were many that were downsized and find it difficult to find new work (they are not the only ones with this problem). Why is it my job to cover their health coverage, when I have my own family of four, for whom I pay THOUSANDS a year (and that's just premiums, not including the exhorbitant deductibles and co-insurance). These programs just are NOT sustainable! I struggle everyday to put food on the table and take care of my family. I cannot afford to continue paying millions of other people's bills!

Gas prices are rising (really stinks for someone that commutes 90 miles/day, in horrid Atlanta traffic, because that is the central location where my field does business, YET it is impossible to afford to move closer) food costs are rising, taxes are rising health care costs are rising. When is enough, enough??

bytejockey
April 08, 2011 at 12:08 pm

"A government which robs Peter to pay Paul can always depend on the support of Paul."
- George Bernard Shaw, ardent socialist and co-founder of the London School of Economics