“It quickly became clear the program was really intended to be a bailout for companies with a large number of union employees”
On Friday, December 9, 2011, the Department of Health and Human Services announced its plan to shut down the Early Retiree Reinsurance Program at the end of this month.
President Obama touted this program as one of the health care law’s “early deliverables” that would be in place through January 2014.
Today, U.S. Senator John Barrasso (R-Wyo.) discussed two reports that suggest the Administration ran out of money years ahead of schedule because they used the program to reward their political allies.
Excerpts of Senator Barrasso’s remarks on the floor of the U.S. Senate:
“The health care law’s supporters said the early retiree program would act as a bridge. They said the program would help employers maintain health insurance coverage for retirees over the age of 55 – but not yet eligible for Medicare.
“They said the program would help people keep their insurance plan until the new health insurance exchanges were up and running in 2014.
“Well it quickly became clear the program was really intended to be a bailout for companies with a large number of union employees.
Program Runs out of Money Two Years Early
“On October 31, of this year – Halloween Day – the ranking member of the Senate Health and Education, Labor and Pensions Committee, Mike Enzi, released a report. It was a report he asked the Government Accountability Office (GAO) to conduct, specifically looking into the early retiree programs implementation.
“The GAO said that through the end of September 2011, the Administration had already spent more than half of the $5 billion allocation.
“Let’s fast forward to Wednesday, December 14, 2011. The House Energy and Commerce Committee released updated information about the early retiree program’s spending.
“As of last Friday, December 9, 2011, the Obama Administration have said, oh we’ve spent over $4.5 billion of the $5 billion budget—91 percent of the total early retiree program budget.
“A budget should have lasted 1,310 days. Instead, this Administration drained the money, taxpayers’ money, hard-earned dollars, in just 579 days.
“The early retiree program has run out of money so fast that it’s going to be forced to close two years early. The Administration has said it will no longer pay out claims submitted after December 31st of this year.
“Mr. President, the health care law’s supporters promised the early retiree program would stay in place through January 1, 2014.
Union-Affiliated Taxpayer Bailout
“How did the Administration allow this program run out of money years ahead of schedule?
“Well it went broke because certain corporations and union-affiliated organizations rushed to grab a taxpayer bailout.
“It is astonishing that the health care law’s supporters forced the American taxpayers to foot the bill to keep private companies and unions’ health insurance benefit promises to their workers.
“Most Americans would be shocked and outraged to learn that the Administration did not even require companies to disclose their earnings in order to get the early retiree program funding.
“News reports indicate small businesses asked the Administration to set up a review process to stop the government entities and unions from consuming all the early retiree program money.
“According to the GAO report, the Administration refused. They decided to distribute early retiree subsidies on a ‘first come, first served’ basis.
“GAO’s findings and the House Energy and Commerce Committee report suggest the Obama Administration used the early retiree reinsurance program to reward its political allies.
“These two reports suggest the Administration did so by directing most of the program’s resources to plans serving unionized auto and government workers.
“Based on the Administration’s own data, nearly half of the entire $5 billion program will be spent on just 20 entities.
“It is fascinating that the most money of all went to the United Auto Workers Retiree Medical Benefits Trust. How much did the United Auto Workers need? Well, they took over $387 million.
“Like many parts of the health care law, the early retiree program just throws money at a problem – rather than trying to fix it.”
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