Reform Law Program for Early Retirees To Close Earlier Than Expected
On Friday, CMS said the Early Retiree Reinsurance Program will shut down at the end of the year because its funding is almost depleted, the Wall Street Journal reports (Radnofsky, Wall Street Journal, 12/9).
CMS said it has spent about $4.5 billion of the $5 billion allocated for the program so the department will stop taking claims for expenses incurred after Dec. 31 (Torres, "Capsules," Kaiser Health News, 12/9).
ERRP was established by the federal health reform law to help cover the health costs for retirees older than age 55 who do not yet qualify for Medicare.
It also is intended to help prevent employers from dropping retiree health coverage before provisions that prohibit insurers from denying coverage based on pre-existing conditions take effect in 2014.
The program allows employers to collect reimbursement for up to 80% of claims costs between $15,000 and $90,000 (California Healthline, 11/2).
The overhaul authorized the program until 2014 or until its funds ran out (Baker, "Healthwatch," The Hill, 12/9). A Government Accountability Office report released in October -- when HHS already had spent about $2.9 billion of the allotted funds for the program -- projected that the fund would be depleted by September 2012 (California Healthline, 11/2).
Some Republicans contend that the fund was allocated inappropriately to profitable business and unions.
The United Auto Workers union received $387 million from the fund through Dec. 2, while AT&T received $214 million and Verizon Communications received $163 million (Wayne, Bloomberg/San Francisco Chronicle, 12/9).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.