A bill that would move future retirees of the U.S. Postal Service (USPS) into the Medicare system is currently moving through the House, causing some experts to worry that the additional spending will strain a system already facing substantial shortfalls.
Section 101 of the proposed Postal Service Reform Act (H.R. 3076) would remove future USPS retirees from the Federal Employees Health Benefits Program and place them in the Medicare system, according to a summary of the bill on congress.gov. Under the act, USPS would no longer be responsible for prepaying future retirement health benefits or covering existing liabilities.
H.R. 3076 would require Medicare-eligible annuitants participating in the Postal Service Health Benefits (PSHB) program to be enrolled in Medicare Part B, a cost estimate analysis by the Congressional Budget Office (CBO) said. The CBO expects that even more USPS retirees would choose to enroll in Part B than do so under the current law. The legislation would also require PSHB plans to participate in Medicare Part D for payments and discounts related to prescription drugs.
CBO estimates that to influx of Medicare subscribers and required part B and D enrollments would increase Medicare spending by $5.6 billion over the 2021-2031 period, the analysis said.
“Current-law projections indicate that Medicare still faces a substantial financial shortfall that will need to be addressed with further legislation,” the Centers for Medicare and Medicaid Services (CMS) and Boards of Trustees overseeing the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds reported to Congress in August 2021. “Such legislation should be enacted sooner rather than later to minimize the impact on beneficiaries, providers, and taxpayers.”
The CMS report said that the depletion date for the Hospital Insurance trust fund was still 2026, the same as the previous year’s report.
Current law requires USPS to pre-fund the health care benefits of its retirees from operating funds, the CMS report said. Under that program, retirees do not rely on the taxpayer-funded Medicare system.
The proposal has caused some to criticize the move as an unfair bailout that will cause issues for the American people.
“As the USPS proposed prefunding retiree health benefits, they should be held accountable to hold up their end of the bargain,” Ross Merchand said in a The Hill editorial. “The increased fiscal strain on Medicare that would inevitably occur with a USPS bailout would lead to unacceptable physician pay cuts, which may lead doctors to stop accepting all new patients.”
H.R. 3076 was introduced on May 11, 2021, by Rep. Carolyn Maloney (D-NY, 12th District) with three original co-sponsors, the summary of the bill said. As of Dec. 14, 2021, there are 102 co-sponsors: 58 Democrats and 44 Republicans. The last action on the bill was in December when the House Committee on Ways and Means granted an extension for further consideration through Jan. 21.
