In a letter to the editor sent to several media outlets, PMG Pat Donahoe explains the primary benefits of the Postal Service’s proposal to manage its own health care program for employees and retirees.
The letter is in response to a recent assessment by the General Accountability Office (GAO). Among its conclusions, the GAO report said USPS would realize large gains from its proposed plan, largely due to an increased reliance on Medicare for eligible employees. “The Postal Service and its employees have already paid $26.5 billion into the program,” writes Donahoe in agreeing with this conclusion. “By not integrating fully with Medicare, Postal Service employees and retirees pay more for their health benefits premiums than private sector employees who are required by their employers to sign up for Medicare.”
The GAO report estimated that if the USPS proposal had been in effect this year, the premiums of most employees and retirees would have been the same or lower than some Federal Employee Health Benefits (FEHB) plans, with similar or higher levels of coverage. “On average, premiums under the proposed Postal Service’s plan would be 16 percent lower than FEHB premiums,” he said.
Finally, Donahoe notes GAO correctly concluded the USPS health care proposal would go “a long way” toward placing USPS on a path to long-term financial stability. “By fully integrating with Medicare, we would not have an unfunded Retiree Health Benefits liability,” he said. “What prudent business in our financial condition would not implement such a plan, given the opportunity to do so?” he asks.
PMG’s letter
A Government Accountability Office (GAO) report issued this week states that the Postal Service would likely realize large financial gains from its proposed health care plan. The GAO’s conclusion is fully consistent with the determination of the Postal Service in this regard.
The GAO report also correctly states that most of the financial benefits from the proposed plan would result from increasing the use of Medicare by postal retirees. This element of the proposed postal health plan is perfectly appropriate and logical, and is consistent with the health plans that any reasonable employer that contributes to the Medicare system would provide for its retirees, to the extent retiree coverage is provided.
As the second largest employer contributor to Medicare in the United States, the Postal Service and its employees have already paid $26.5 billion into the program. By not integrating fully with Medicare, Postal Service employees and retirees pay more for their health benefits premiums than private sector retirees who are required by their employers to sign up for Medicare. We are simply asking to be treated as any other private employer or state and local government employer that provides retiree health care. No less, no more.
The GAO also estimated that if the proposed health plan had been implemented in 2013, most postal employees and retirees would have had similar or lower premiums compared to the selected Federal Employees Health Benefits (FEHB) plans, with similar or higher levels of coverage for many services. Under the Postal Service sponsored health care plan, a small minority of employees electing full family coverage would pay more for health care benefits, but the overwhelming majority would pay far less immediately, and all employees would pay less over their careers. On average, premiums under the proposed Postal Service’s plan would be 16 percent lower than FEHB premiums.
The GAO rightly concluded that a Postal Service health care plan would go a long way toward putting the Postal Service on a path to solvency and long-term financial stability. By fully integrating with Medicare, we would not have unfunded Retiree Health Benefits liability, saving $5.6 billion to $5.8 billion annually. What prudent business in our financial condition would not implement such a plan, if given the opportunity to do so?
Without addressing the cost issue in a responsible way, the Postal Service may be unable to afford to provide health care benefits to retirees. Our proposal assures that we will.
Patrick R. Donahoe
Question. If postal employees are not federal employees then why are we able to contribute to the Federal Campaign Fund?
“All tyranny needs to gain a foothold is for people of good conscience to remain silent”
“when bad men combine, the good must associate; else they will fall, one by one”
Edmund Burke
Write to your politicians. Let them know we are sick of there nonsense and we will vote them all out of office. Watch very closely how they vote on postal reform and other bills that are destroying the middle class.
Retired employees should be left alone. We did our time and now he wants to change the rules? Federal employee is right,retired postal employees cost the USPS nothing!
I understand that Mr. Donahoe has excluded himself from the mandatory plan to manage postal employee’s healthcare. So, it’s a good plan for the peons, put not for the potentate’s – I guess?! Why does he get to worm his way out of it??? And why???
If the postal service can take away our health insurance, they can take away our pensions. All federal employees should be aware and concerned. The government, well at the very least Donahoe is telling us he does not have to live up to the contract with federal employees. Remember when postal employees retire they have no connection to the post office. They are retired federal employees. Federal employees better wake up to what is happening. I believe a class action lawsuit should be the way to go.
Please resign, Mr. Donahoe.