A congressional effort to repair the nation’s deteriorating mail service could come on the expense of an excellent larger and extra difficult downside: Medicare solvency.
The Postal Service Reform Act of 2022 would assist shore up submit workplace funds by ending the bizarre and onerous authorized requirement to fund 75 years of retirement well being advantages prematurely. In return, it could require future Postal Service retirees to enroll in Medicare.
In line with the Congressional Finances Workplace, the transfer might save the postal retirement and well being applications about $5.6 billion via 2031 whereas including $5.5 billion in prices to Medicare throughout that span, and doubtless rather more in later years.
Contemplating the large measurement of Medicare — it spent $926 billion in 2020 — the prices don’t quantity to a lot. That small monetary influence, and the continuing instant crises with mail supply, most likely account for the robust bipartisan assist the postal invoice has obtained in Congress, with 120 Republicans becoming a member of Democrats to cross the invoice within the Home on Feb. 8.
However late within the course of, some lawmakers are elevating alarms over the transfer, arguing that possibly Congress ought to look extra fastidiously on the monetary influence to Medicare’s belief fund, which is anticipated to run dry in 2026.
“This invoice merely shifts threat to Medicare recipients by including billions of latest prices to Medicare,” Sen. Rick Scott (R-Fla.) mentioned Feb. 14 in blocking requests on the Senate flooring to expedite passage of the invoice. Scott’s objection delayed consideration of the invoice till early March, after the Senate returns from its Presidents Day break.
Presently, Postal Service staff are lined by plans supplied within the Federal Workers Well being Advantages program. After they retire they’ve a number of selections for well being care, together with staying of their authentic plan or switching to Medicare as their major protection and having an FEHB plan function supplementary protection. About 20% of postal retirees don’t join Medicare, preferring their present federal plan. Underneath this laws, they must change to Medicare, however they’d hold a brand new Postal Service model of the FEHB plan as secondary protection.
Because the change wouldn’t absolutely take impact till 2025, and the Congressional Finances Workplace’s price estimate doesn’t seize a full decade, Scott needs to know the value tag for the following 10- and 20-year durations, in addition to the particular impacts on the varied parts of Medicare, akin to premiums for Medicare’s Half D drug plan and the Half B program, which covers a wide range of outpatient providers.
The general price is more likely to be rather more important than the shorter-term evaluation discovered, mentioned Robert Moffit, a senior fellow on the conservative Heritage Basis, who has additionally raised considerations.
“There’s a complete price that’s being ignored,” Moffit mentioned. “You mainly have a scenario the place you’ve got unfunded liabilities within the Postal Service Well being Advantages Program, retiree advantages, that quantity to about $75 billion.”
That projected price doesn’t vanish. It falls on Medicare, although the precise influence is unclear. Moffit agreed with Scott that Congress needs to be longer-term implications, together with results on premiums and the prices borne by taxpayers and beneficiaries.
“We must step again, take a deep breath, and take a look at what we’re doing right here,” Moffit mentioned.
Postal Service unions should not nervous in regards to the change, nonetheless, with all of them supporting the change, famous Democrats who responded to Scott earlier this month.
Senate Majority Chief Chuck Schumer argued that the invoice would save the federal government cash total, and that transferring postal retirees into Medicare would be certain that they obtain advantages they’ve paid for however weren’t utilizing.
For Schumer and most different lawmakers, the comparatively small influence on Medicare is solely not as urgent as getting the mail delivered on time.
“We are going to cross this invoice as a result of America wants it. Rural individuals want it. Senior residents want it. Veterans want it — 80% of the veterans’ prescriptions are despatched via the mail,” Schumer mentioned. “No one needs to be standing in the way in which of this invoice.”
Scott is now amongst a minority objecting to the newest effort and pointing to Medicare.
Others who stay involved about Medicare’s poor funds additionally thought fixing the issues with postal supply was price the fee to Medicare.
“I might let Congress have a small win right here and, actually, this isn’t only a small win,” mentioned Mary Johnson, a Social Safety and Medicare coverage analyst on the Senior Residents League advocacy group.
She mentioned the failures of the mail system even have well being penalties, with funds for insurance coverage and shipments of prescriptions going lacking, which has occurred to her.
The shift to Medicare envisioned within the laws might add to the sense of urgency — all these retired postal staff can be becoming a member of Medicare simply in time for a solvency disaster if Congress drags its toes. “It’s inaction in Congress that will trigger that,” Johnson mentioned.
Johnson famous it will likely be tough to achieve a bipartisan consensus on one thing as momentous as Medicare reform. “You’re going to need to cross one thing, and it will depend on who’s the bulk. It will not be very fairly when it occurs.”
KHN (Kaiser Well being Information) is a nationwide newsroom that produces in-depth journalism about well being points. Along with Coverage Evaluation and Polling, KHN is among the three main working applications at KFF (Kaiser Household Basis). KFF is an endowed nonprofit group offering data on well being points to the nation.
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