The 2016 Postal Service Reform Act (H.R. 5714) proposes shifting postal retirees’ primary health care coverage from the Federal Employees Health Benefits Program (FEHBP) to Medicare. Proponents call this a consensus proposal for integrating the FEHBP with Medicare. It is not. The proposal’s impact on both postal retirees and taxpayers could be substantial. For taxpayers, the House bill would shift unfunded postal obligations to Medicare, which is already burdened by an enormous 75-year unfunded obligation. The bill also perpetuates 100 percent wraparound supplemental insurance, which provides “first dollar” coverage and “free” medical care. This arrangement drives excessive Medicare use, and thus imposes ever higher costs on both Medicare beneficiaries and taxpayers. Postal annuitants would be forced to enroll in Medicare Part B while continuing premium payments to the FEHBP if they want to maintain any FEHBP benefits or choice among FEHBP plans. Paying two premiums instead of one is an unforeseen and unbudgeted cost to these retirees. It is long past time for Congress to address FEHBP issues that affect all enrollees, not single out postal annuitants. Congress needs to consider a wider and more sensible range of options to deal with the underlying problems. These options would solve postal financial problems while reducing, rather than increasing, costs.
The House Committee on Oversight and Government Reform recently considered the Postal Service Reform Act (H.R. 5714). The bill proposes shifting postal retirees’ primary health care coverage from the Federal Employees Health Benefits Program (FEHBP) to Medicare. Proponents call this a consensus proposal for integrating the FEHBP with Medicare. It is not. The proposal’s impact on postal retirees and taxpayers alike could be substantial.
For taxpayers, the House bill would shift unfunded postal obligations to Medicare’s unfunded long-term obligations. Today, Medicare is burdened by an enormous 75-year unfunded obligation that ranges from $32.4 trillion to $43.5 trillion, depending on the assumptions.[1] The bill also perpetuates 100 percent wraparound, supplemental insurance, which provides “first dollar” coverage and “free” medical care. This arrangement drives excessive Medicare use, and thus imposes ever higher costs on both Medicare beneficiaries and taxpayers alike.[2]
For postal annuitants, the bill would result in these retirees facing either a significant reduction in retirement income because of additional premium costs, or a loss of existing benefits offered through the FEHBP. Under the proposal, postal annuitants would be forced to enroll in Medicare Part B, required to pay the premiums for Part B, and continued premium payments in the FEHBP if they want to maintain any FEHBP benefits or choice among FEHBP plans. Paying two premiums instead of one is an unforeseen and unbudgeted cost to these retirees.
The House postal-retiree health care proposal misses the underlying challenges facing the FEHBP and its uneasy co-existence with Medicare. The proposal fails to address past policy mistakes, makes the interaction between both programs worse by cementing a bad wraparound supplementation model, and puts postal annuitants in the cross hairs for a major economic penalty. For a postal-annuitant couple with an average pension of $36,000 a year,[33] being forced to pay about $3,000 for two Medicare Part B premiums to avoid losing all health insurance is not a light tap on the wallet.
It is long past time for Congress to address FEHBP issues that affect all enrollees, not single out postal annuitants. Congress needs to consider a range of options to deal with the underlying problems of (1) improving the cost-control performance of the FEHBP, and (2) intelligently integrating the interfaces between Medicare and the FEHBP to better control Medicare costs and to provide more sensible choices to annuitants. Not so coincidentally, these broader reforms would eliminate the deficit in the PSRHBF several times over, without any annuitant, postal or non-postal, being compelled to buy an unneeded and costly second health plan in order to keep his current plan, while saving taxpayers billions of dollars annually in the FEHBP and Medicare programs.
Keep in mind that this poorly conceived idea of forcing Postal retirees to take Medicare is being aggressively marketed and pushed by Postal senior management. It started with the last Postmaster General and continues with current management, all grasping at personal self preservation. They are telling Congress that implementing this health care change provision will save the Postal Service billions. This is not the truth, the savings to the Postal Service is small (about 7 tenths of one percent of revenue). But the adverse impact on retirees is significant. There are other, less hurtful, ways to achieve the same benefit without forcing retirees into Medicare. Medicare enrollment should remain a choice for retirees as it is now.
I just can’t believe our representatives in Congress are believing the Postal management half truths and are going along with legislation that would hurt retirees.
We all should all tell our representatives to leave Postal retirees alone by leaving our health benefits as they are now Changing the benefits of those who have already retired is unfair and a dangerous precedent.
If this bill is passed in it’s present form, Postal workers can say goodbye to their Federal Employee Health Benefits. Postal retirees age 65 & over will be FORCED to purchase Medicare parts B & D thus making Medicare their Primary insurer. Good luck finding a doctor that takes Medicare! If you are happy with your present health plan then please contact your elected representatives in Congress and tell them not to take away your FEHB. You can sign up to track this bill at:
https://www.govtrack.us/congress/bills/114/hr5714
You won’t loose FEHB, it will be combined with Medicare. Insurers will offer so called “wrap around” policies – insurer pays whatever Medicare doesn’t cover. Read the bill.
I absolutely oppose this bill (HR-5714)in its entirety. We earned our FEHB so why are they threatening to take us(just Postal Retirees) out of FEHB if U.S. Postal Retirees don’t sign up for Medicare. It’s not good for Postal Retirees, Medicare, or the American People. To all postal retirees and future retirees and postal workers: PAY ATTENTION TO WHAT THEY ARE TR YING TO DO TO YOU! Contact your representative and say No! No! No! To HR-5714.
My sole question is this: Why have we socked nearly $40 BILLION into the PSRHBP, nearly bankrupting us in the process, just to have them screw us over on our retiree health benefits? This amount should be enough to pay for the health benefits of every living retiree and every currently employed, future retiree…
All you had to say was ‘Heritage Foundation’. Any time a ‘taxpayer watchdog group’ starts laying out policy ideas for the postal service, I have to ask ‘why’? Last time I checked, we hadn’t received a dime of taxpayer monies since 1983, were nearly $4 billion in-the-black since 2013, and had $10 billion in cash reserves…
Their are many people that think that it is justified that the Postal Service, and only the Postal Service, must pre pay their health care costs. Those people are so afraid that they might have to pay for some one else’s health care. Those same people don’t mind forcing others to pay school taxes. They believe that they can force the cost of education, school sports, transportation on buses, and field trips on to others! Why should they pay for their children costs when they tax payer can pay?
I wonder if they did get their way, what would become of all the pre-funded monies we’ve already paid? Would all of us get piece of the billions already paid? Where would all the pre_funded money go? I wonder?
I just read the crap article from Mr. Francis. He thinks the Postal Service would, and America better off, if the employees would be removed from federal designation and let the “free market” manage the Postal Service’s fate. He also says that it is terrible that the employees retirement and health care is guaranteed by law! And what of the massive “Postal Services health costs” ? So every thing must be controlled by the markets! Start with the public schools, fire services, and yes the Army and Navy! Every function in America must make a profit! And as for Postal employees retirement and health care is guaranteed by law, why is that bad? Mr. Frances thinks that no employee should have any thing after many years of work. The idea that an employee can’t be cheated out of his retirement and health care is so foreign to many “free marketers” If one has his benefits stolen from him, or her, is too bad. Just think of the unfortunate rice bastards that want to hoard more money. And as for the” unfunded Postal health obligations” when will the Heritage Foundation start to pay their “unfunded health care obligations” Way past time to make every one to pre pay for health care 75 years in advance. Even Congress! We can thank ex President Forrest Gump!
Are you crazy what are you doing. I have my health care when I retired contract.
Get ready….bend over.
Rest assured what ever our elected officials decide it will not be in our best interests.
There is nothing like being mislead by the post Office, unions, and the Government at
large. Instead of holding the bad eggs accountable, they are considering sticking it
to very people who have tried to do the the right thing in regards to the public all along. How about holding the people accountable for all these screw ups costing the
country billions . It is not the peoples job to continuously to pay the price for stupidity.