Submitted by: Myke
$5B Hollywood Handout Bankrupting Obamacare
Thursday, 24 Mar 2011 05:51 PM
Read more on Newsmax.com: $5B Hollywood Handout Bankrupting Obamacare
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A $5 billion handout to states, big corporations, and Hollywood unions to subsidize health insurance for early retirees is threatening to bankrupt a major part of the year-old healthcare reform law, according to staffers of the House Energy and Commerce Committee.
A small percentage of the organizations signed up for the plan has already drained more than $500 million from the program’s coffers.
Like many provisions in Obamacare, the “Early Retiree Reinsurance Program” has largely escaped public scrutiny and congressional oversight. The program provides subsidies to employers and unions to cover between $15,000 and $90,000 of the healthcare costs for early retirees.
The ERRP program was designed primarily to help early retirees over age 55, along with their spouses and dependents, who are not eligible for Medicare.
Nearly 5,500 organizations have been approved to participate in the program. Among the 253 participants that received more than $535 million in ERRP funding last year were Hollywood unions such as the Screen Actors’ Guild, and large corporations like Boeing, Northrop Grumman, and Sara Lee.
The lion’s share of ERRP reimbursements went to state governments, followed by non-profits, corporations, unions, and religious organizations, the report says.
Over one-third of the of the money spent in 2010, some $182 million, went to just five government entities: California Public Employees’
Retirement System — $57.8 million; State of New Jersey Treasury Department, Pension Accounting Services — $38.6 million; Georgia Department of Community Health, State Health Benefit Plan — $35 million; Commonwealth of Kentucky — $29.7 million; and Employees Retirement System of Texas — $20,982,299.
The retiree reinsurance money was supposed to last until 2014. The program received $5 billion — the same amount provided for high-risk coverage pools for people with pre-existing conditions. But with 10 percent of the allocated funds already spent on less than 5 percent of program participants in just a few months, the fund will likely run dry by early next year, according to Richard Popper, Director of the Office of Insurance Programs at the Center for Consumer Information and Insurance Oversight.
“The Early Retiree Reinsurance Program is helping to control healthcare costs and protect coverage for early retirees and their families,” says HHS Secretary Kathleen Sebelius. “This program is providing critical financial relief to help states, private employers and other organizations preserve access to affordable health coverage for millions of Americans.”
The House staffers report concluded differently, however.
“With the public debate focused squarely on the spiraling costs of the federal budget, and this administration’s lackluster efforts to create job growth, the committee staff was surprised to learn that the healthcare law would subsidize the early retirees of corporate America, Hollywood, state, county and municipal employees, as well as unions,” the Congressional staffers wrote.
“It is inappropriate that a bill sold to the American people as healthcare legislation would contain a sweetheart deal for unions and Hollywood, and it is grossly inefficient that in troubling economic times, the American taxpayer would be asked to subsidize the healthcare costs of massive corporations.”