Troubled Cities See Exchanges as Way to Unload Retirees

[Purveyor]

By Mark Niquette and Alex Wayne - Jul 1, 2013
Detroit (9845MF) is facing bankruptcy, and Chicago wants to cut retiree benefit costs. Both are turning to President Barack Obama’s health-care overhaul in what could become a road map for cash-strapped cities.

The municipalities plan to end or limit health coverage for retirees under 65 who don’t yet qualify for Medicare, with the expectation they can get insurance in the exchanges opening Jan. 1 under President Barack Obama’s health-care law.

With U.S. cities facing rising benefit costs and billions of dollars in unfunded liabilities, more municipalities will consider moving retirees off city rolls and into the exchanges, even if they continue to subsidize the coverage, said Neil Bomberg, a program director at the National League of Cities in Washington.

“Cities and towns will be looking at ways to reduce those costs, and the exchanges may provide a very viable mechanism,” Bomberg said in an interview.

Coverage for about 7 million people expected to enroll in health exchanges next year will cost U.S. taxpayers about $26 billion, the Congressional Budget Office says. That figure nearly doubles a year later, and exchange coverage is expected to total $1.1 trillion through 2023. A spokeswoman for the agency, Deborah Kilroe, said in an e-mail that it has no estimate of how many people in exchanges will be retirees.

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http://www.bloomberg.com/news/2013-07-02/troubled-cities-see-exchanges-as-way-to-unload-retirees.html

[mike_c]

1. this is why we need single payer universal health care, not insurance mandates....

This is exactly what I feared would happen. Some private employers have predicted they would cease providing group insurance to employees once the employees were mandated to provide their own otherwise-- now municipalities are talking about unloading public employees onto the private insurance exchanges. Think they're gonna increase their wages to compensate for the cost of private insurance?

[fleur-de-lisa]

2. Bingo! - eom