A congressional effort to repair the nation’s deteriorating mail service might come on the expense of an excellent greater and extra difficult drawback: Medicare solvency.
The Postal Service Reform Act of 2022 would assist shore up publish workplace funds by ending the weird and onerous authorized requirement to fund 75 years of retirement well being advantages upfront. In return, it could require future Postal Service retirees to enroll in Medicare.
In line with the Congressional Price range Workplace, the transfer might save the postal retirement and well being packages about $5.6 billion by 2031 whereas including $5.5 billion in prices to Medicare throughout that span, and doubtless far more in later years.
Contemplating the huge dimension of Medicare — it spent $926 billion in 2020 — the prices don’t quantity to a lot. That small monetary affect, and the continued instant crises with mail supply, in all probability account for the sturdy 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 rigorously on the monetary affect to Medicare’s belief fund, which is predicted to run dry in 2026.
“This invoice merely shifts danger to Medicare recipients by including billions of latest prices to Medicare,” Sen. Rick Scott (R-Fla.) stated 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.
At the moment, Postal Service staff are lined by plans supplied within the Federal Workers Well being Advantages program. Once they retire they’ve a number of selections for well being care, together with staying of their unique 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. Below this laws, they must change to Medicare, however they’d preserve a brand new Postal Service model of the FEHB plan as secondary protection.
Because the change wouldn’t totally take impact till 2025, and the Congressional Price range Workplace’s value estimate doesn’t seize a full decade, Scott needs to know the worth tag for the following 10- and 20-year durations, in addition to the particular impacts on the varied parts of Medicare, similar to premiums for Medicare’s Half D drug plan and the Half B program, which covers quite a lot of outpatient providers.
The general value is prone to be far more important than the shorter-term evaluation discovered, stated Robert Moffit, a senior fellow on the conservative Heritage Basis, who has additionally raised issues.
“There’s a whole value that’s being ignored,” Moffit stated. “You principally have a state of affairs the place you will have unfunded liabilities within the Postal Service Well being Advantages Program, retiree advantages, that quantity to about $75 billion.”
That projected value doesn’t vanish. It falls on Medicare, although the precise affect is unclear. Moffit agreed with Scott that Congress must be taking a look at longer-term implications, together with results on premiums and the prices borne by taxpayers and beneficiaries.
“We should step again, take a deep breath, and take a look at what we’re doing right here,” Moffit stated.
Postal Service unions should not anxious in regards to the change, nevertheless, 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 affect on Medicare is just 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 by the mail,” Schumer stated. “No one must 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 value the fee to Medicare.
“I’d let Congress have a small win right here and, actually, this isn’t only a small win,” stated Mary Johnson, a Social Safety and Medicare coverage analyst on the Senior Residents League advocacy group.
She stated 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 employees could be becoming a member of Medicare simply in time for a solvency disaster if Congress drags its ft. “It’s inaction in Congress that may trigger that,” Johnson stated.
Johnson famous it is going to be tough to succeed in a bipartisan consensus on one thing as momentous as Medicare reform. “You’re going to should cross one thing, and it depends upon who’s the bulk. It will not be very fairly when it occurs.”