Mar 15, 2011
According to a report released Wednesday, March 2nd, by the Department of Health and Human Services, a government program setup by the Affordable Care Act to reduce health insurance costs for early retirees served 5,500 employer plans covering 61,000 people in 2010.
The Early Retiree Reinsurance Program (ERRP) has spent $535 million of the $5 billion appropriated by congress to help employer plans that provide for early retiree coverage.
Early retirees, people between the ages of 55 and 65, often have very high health care costs yet don’t qualify for Medicare. To help insure that employers continue to cover these former employees, this program reimburses health plans 80% of the medical costs early retirees incur between $15,000 and $90,000 per year. This means that a qualified individual that utilized over $90,000 in medical procedures received a subsidy of $60,000.
The beneficiaries of this program include retirees from state and local governments, businesses, nonprofits, unions and religious organizations. Based on feedback received by HHS from the health plans participating in the program, 20% of plans will use the subsidies to reduce their own cost, 20% will use the subsidies to reduce the premiums and out-of-pocket costs for their plan participants, and 60% will use the money for both.
For more information on the program visit the official site here.
-- HealthCare.gov / The Hill / National Journal / ERRP.gov
