As of January 1st yet another ObamaCare provision has crashed and burned. This is the “Early Retiree Reinsurance Program” (ERRP), which was a $5 billion giveaway to unions, state and municipal governments, and fat cat corporations.
The idea was to encourage such entities to continue health benefits for early retirees (age 55 — 64) until the wonders of ObamaCare kick in in 2014. The program provided “reinsurance” of 80% of claims between $15,000 and $90,000. Using the word “reinsurance” for this program is another case of Orwellian-speak by this Administration. “Reinsurance” suggests that the beneficiary paid a premium for the coverage. But in this case it was simply a matter of shoveling taxpayer money into the coffers of the chosen organizations.
The program began on June 1, 2010 and was supposed to last until January 1, 2014. But it turns out that getting free money was so popular that all the dough ran out by January 1, 2012 — a mere 19 months. So, no more money will be distributed, alas.
It will be interesting to see what happens next. Virtually all of these organizations have union contracts that require them to provide the benefits, so they are unlikely to suddenly drop the coverage.
Let’s take a look at who got the moolah in a few sample states — Illinois, Ohio and Pennsylvania. These are the numbers as of December 2, 2011.
Illinois. In Illinois, 146 organizations received funds, of which 34 went directly to unions and 31 went to state or local governments. The organizations that received $5 million or more include:
- Abbott Laboratories 8,599,923
- BOT of County Employees and Officers Fund 6,177,913
- BP Corporation 16,179,320
- Caterpillar, Inc. 20,335,732
- Chicago Transit Authority 6,801,120
- City of Chicago 9,476,498
- Deere & Company 23,100,529
- Exelon Corporation 11,995,923
- Kraft Foods 5,401,682
- Millercoors LLC 5,899,012
- Motorola, Inc. 5,076,088
- Navistar, Inc. 13,392,799
- Public School Teachers Pension Fund 5,790,870
- The Boeing Company 50,160,905
- United Airlines 13,983,605
Ohio. In Ohio, 105 organizations received funds, of which 36 went directly to unions and 2 went to state or local governments. The organizations that received $5 million or more include:
- Bridgestone Americas, Inc. 5,144,493
- Firstenergy Corp 6,125,591
- Ohio Public Employees Retirement System 180,084,872
- Police and Firemen’s Disability 16,870,013
- State Teachers Retirement System 75,998,236
- The Proctor & Gamble Company 19,186,151
- The Timken Company 5,378,873
Pennsylvania. In Pennsylvania, 147 organizations received funds, of which 24 went directly to unions and 57 went to state or local governments. The organizations that received $5 million or more include:
- Alcoa, Inc. 17,404,025
- Commonwealth of Pennsylvania 32,192,146
- GlaxoSmithKline, LLC 7,641,945
- Retirees of Goodyear Tire & Rubber 7,362,723
- Steelworkers Health & Welfare Fund 7,720,376
- United States Steel Corporation 11,752,168
So again, the entire $5 billion was depleted in just 19 months, instead of the 43 months originally projected. That is swell for the organizations that got the money, but now we are right back to where we started. All of these organizations now have to pay for the benefits themselves or drop their coverage. But most are forbidden from dropping coverage because of union contracts. Perhaps they will have to renegotiate these contracts, which is what they should have done 19 months ago.
(Hat tip to Peter Suderman, whose December 12 article in Reason provided the links to this information.)