bripat9643
Diamond Member
- Apr 1, 2011
- 170,163
- 47,312
- 2,180
It seems like every day we have to take another bite of this shit sandwich:
Here's a feature of Obamacare you probably don't know about: A transfer of hundreds of billions of dollars in liabilities to retired public employees from state and local governments to federal taxpayers.
Here's how it's going to work.
States and localities have enormous liabilities in the form of health benefits they have promised to provide to retired workers. (Finance professionals call these benefits OPEB, or "other post-employment benefits.") Most public sector retirees get health plans until they turn 65, and then supplemental coverage on top of Medicare after that.
In most cases, state and local governments haven't prefunded these liabilities at all. As Americans age and health care costs rise, this is becoming a major drain on state and local finances, arguably more important than more-widely-discussed problems with public employee pensions.
But Obamacare will give states and cities a major out. Instead of providing health care to under-65 retirees, they can tell them to go buy health plans in the Obamacare exchanges. In many cases, those retirees will qualify for substantial subsidies to buy such plans. States and localities will often stand to save thousands of dollars per retiree per year, even if they provide a cash stipend to help each employee buy insurance in the exchange.
All told, state and local governments should be able to shift hundreds of billions of dollars in OPEB liabilities to the federal government. That will mean major savings for those governments. But it will also drive costs upward at the federal level.
Read more: Obamacare Is A Stealth Bailout Of State And Local Governments - Business Insider
Here's a feature of Obamacare you probably don't know about: A transfer of hundreds of billions of dollars in liabilities to retired public employees from state and local governments to federal taxpayers.
Here's how it's going to work.
States and localities have enormous liabilities in the form of health benefits they have promised to provide to retired workers. (Finance professionals call these benefits OPEB, or "other post-employment benefits.") Most public sector retirees get health plans until they turn 65, and then supplemental coverage on top of Medicare after that.
In most cases, state and local governments haven't prefunded these liabilities at all. As Americans age and health care costs rise, this is becoming a major drain on state and local finances, arguably more important than more-widely-discussed problems with public employee pensions.
But Obamacare will give states and cities a major out. Instead of providing health care to under-65 retirees, they can tell them to go buy health plans in the Obamacare exchanges. In many cases, those retirees will qualify for substantial subsidies to buy such plans. States and localities will often stand to save thousands of dollars per retiree per year, even if they provide a cash stipend to help each employee buy insurance in the exchange.
All told, state and local governments should be able to shift hundreds of billions of dollars in OPEB liabilities to the federal government. That will mean major savings for those governments. But it will also drive costs upward at the federal level.
Read more: Obamacare Is A Stealth Bailout Of State And Local Governments - Business Insider
