One Retiree Health Reform Program So Popular It Will
Stop Taking Applications
Early Retiree Reinsurance Program has used nearly
$1.8 billion to help early retirees; nearing funding limit
April 1, 2011 One program in the Affordable Care
Act has been so successful that no more applications will be accepted
after May 5. The Centers for Medicare & Medicaid Services released a
report yesterday showing the Early Retiree Reinsurance Program has
provided nearly $1.8 billion to organizations to reduce health insurance
costs for retirees and their families.
The ERRP has provided funds to more than 1,300
employers across all 50 states.This Affordable Care Act program is
providing significant relief to a broad array of businesses, state and
local governments, non-profits, unions and others that offer health
insurance to their early retirees, according to the CMS news release.
CMS also announced that, due to the overwhelming
response, the ERRP program will no longer be accepting applications
after May 5, 2011, consistent with the laws guidance based on the
availability of funding.
We are thrilled with the success of the Early
Retiree Reinsurance Program and excited that we are helping maintain
coverage and moderate costs for millions of American workers and
retirees, said Steve Larsen, director of the Center for Consumer
Information and Insurance Oversight (CCIIO) at CMS, which administers
the program.
Insurance for older Americans is over four times
more expensive than coverage for young adults and we are happy that this
program is helping employers maintain coverage.
The report details reimbursements received by each
participating plan sponsor. Most of the individual ERRP payments made
in 2010 were for less than $1 million, and 43-percent of individual
payments were for less than $100,000.
In addition to the smaller payments, larger plans
covering millions of retirees including private corporations, state
governments, and multi-employer welfare plans received large
reimbursements that have provided essential support as they struggle to
maintain coverage and keep costs low.
One large employer reported that ERRP
reimbursements provided a 3-percent premium discount for retirees, a
savings of up to $200 million.
Health care costs are one of the most daunting
challenges to the long-term growth and success of businesses, said
Richard Popper, director of Insurance Programs at CCIIO. This program
makes sure that no matter who you worked for, a large or small company,
your former employer has the resources necessary to keep you covered.
April 1, 2011 One program in the Affordable Care
Act has been so successful that no more applications will be accepted
after May 5. The Centers for Medicare & Medicaid Services released a
report yesterday showing the Early Retiree Reinsurance Program has
provided nearly $1.8 billion to organizations to reduce health insurance
costs for retirees and their families.