Retiree health premiums and postal reform

When politicians introduce legislation with “reform” in its title, Washington’s political veterans know it probably means one of two things.  Either it is:

  • A must-pass piece of legislation that will solve lots of problems and make things better or…
  • it is time to prepare for a spanking.

So it is with the new Postal Service Reform Act introduced in the Senate. Its cosponsors — three Democrats and one Republican — said it would put the U.S. Postal Service on a better financial foundation.  Opponents say that by requiring Medicare Part B enrollment for retirees who already have health insurance it could mean higher health insurance costs for postal retirees and, down the road, maybe for all civil service annuitants.

The two major postal employees unions, the American Postal Workers Union and the National Association of Letter Carriers, favor the bill by Sens. Tom Carper (D-Del.), Jerry Moran (R-Kan.), Heidi Heitkamp (D-N.D.) and Claire McCaskill (D-Mo.). The unions are divided along craft lines — the APWU represents inside employees, mostly clerks, and the NALC represents outside delivery personnel.

Both have retirees in their ranks but the majority of their members are still working. Both said it would protect benefits to the public, such as six-day delivery, and let the postal service expand its revenue base by allowing it to deliver alcoholic beverages and exempt postal retirees from being required to enroll in Medicare Part B

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The National Association of Active and Retired Federal Employees opposes the reform plan, arguing it is a plan to “balance the Postal Service’s books on the backs of postal retirees.” NARFE President Richard G. Thissen said the plan would lower USPS health insurance costs — it now pays 75 percent of the total premium — by shifting primary responsibility for retiree health coverage from the Postal Service to Medicare. The move could force 76,000 postal retirees to “pay additional Medicare (Part B) premiums to keep their current health insurance,” he said. NARFE warns that down the road it could be applied to nonpostal retirees as a way to cut government health insurance costs.

A study by Walton Francis of last year’s bill concluded that in addition to raising premium costs for a retired postal couple by over $3,000 a year, and costing Medicare an additional $9,000 a year to pay the government share of those Medicare premiums, it would increase health care utilization by providing 100 percent coverage of all doctor bills.

Francis said this would offset some of the retiree premium costs, but cost Medicare and the USPS an additional $2,000 a year or more to pay for unnecessary care.

An outside industry expert, who does not like the reform plan, said he thought the unions are supporting it “because they want to see that [USPS] debt wiped off the books so they can get better pay raises [for employees] in their negotiations.”

Another said the USPS is burdened because a dozen years ago Congress made it the only federal agency that must prefund all health insurance costs.  Shortly thereafter the Great Recession hit, he said, thereby reducing projected mail volume growth. That was also compounded by competition from private carriers.

“Now they are looking for a way out, and they think this is it,” the expert said.

Because of the short legislative season, backers want to fast-track this bill — a similar plan got bogged down in the House last year — allowing it to bypass many committee hurdles.

The thing active and retired feds need to know is how much of an impact, if any, this would have on how much they will have to pay for adequate health insurance coverage.

Nearly Useless Factoid

By Amelia Brust

Koalas each have unique fingerprints which look so similar to human fingerprints that they require microscopic analysis to tell them apart.

Source: Livescience.com