Top Democrats, including those within the Obama administration, are celebrating the first round of applicants accepted into the new Early Retiree Reinsurance Program, created as part of the landmark healthcare reform law enacted earlier this year.
The program is designed to help make health coverage affordable for Americans aged 55 years and older but not yet eligible for Medicare.
Nearly 2,000 employers, representing large and small businesses, state and local governments, educational institutions, non-profits, and unions have been accepted into the program and will begin to receive reimbursements for employee claims this fall, according to an announcement by the Department of Health and Human Services.
Created by the Affordable Care Act as a bridge to the new health insurance exchanges to be established in 2014, the Early Retiree Reinsurance Program provides $5 billion in financial assistance to employers and unions to help them maintain coverage for early retirees age 55 and older who are not yet eligible for Medicare. Businesses and other employers and unions that are accepted into the program will receive reimbursement for medical claims for early retirees and their spouses, surviving spouses, and dependents. Savings can be used to reduce employer health care costs, provide premium relief to workers and families, or both. The program ends on January 1, 2014 when state health insurance exchanges are up and running for consumers to use to purchase more affordable coverage.
“In these tough economic times, it is difficult for employers to keep up with skyrocketing health care costs for employees and retirees. Many Americans who retire before they are eligible for Medicare see their life savings disappear because of medical bills and exorbitant rates in the individual health insurance market,” says Health and Human Services Secretary Kathleen Sebelius. “The Affordable Care Act’s Early Retiree Reinsurance Program will make it a little easier for employers to provide high-quality health benefits to their retirees as we work to put in place market reforms to lower costs for all.”
Separately, House Speaker Nancy Pelosi also touted the first applicants to be accepted into the program. A strong force in getting healthcare reform passed through Congress, Pelosi also took a swipe at Republicans who now call for repeal of the healthcare reform law.
“Today’s announcement is a crucial step in ensuring that hundreds of thousands of Americans aged 55 to 64, who retire but are too young to qualify for Medicare, have access to affordable health care, by providing businesses with the resources they need to guarantee that coverage,” she says. “It is the height of irresponsibility for Congressional Republicans to continue to call for repeal of health care provisions that would deny early retirees both peace of mind and access to quality health care — and hurt America’s businesses struggling to create and save jobs and do the right thing by their employees.”
The administration’s top official representing workers also touted the benefits of the Early Retiree Reinsurance Program as part of ensuring an overall secure U.S. economy.
“In these tough economic times, the combination of rising health care costs and lower revenues has made it increasingly difficult for private companies, unions, nonprofits, religious organizations, and state and local governments to provide quality and affordable health coverage for their retirees. And, as Labor Day approaches, I want to recognize those employers who are committed to maintaining adequate benefits for their workers and retirees in spite of these challenges,” Labor Secretary Hilda Solis says.
“Access to affordable health insurance is a not only a key component of retirement security but an important aspect of ensuring good jobs for everyone,” Solis adds. “I commend Secretary Sebelius for her leadership in this area as well as the private companies, unions, nonprofits, religious organizations and governments that successfully applied for grants that will make health insurance more affordable for their retirees.”
The publisher of the news site On The Hill, Scott Nance has covered Congress and the federal government for more than a decade.