PROFITABLE COMPANIES AND UNIONS GETTING SUBSIDIES FOR EARLY RETIREE BENEFITS

Washington, Apr 1 -

Rep. Cliff Stearns (R-FL), Chairman of the Energy and Commerce Committee’s Oversight and Investigations Subcommittee, held a hearing today on the high-risk insurance pool established under the Patient Protection and Affordable Care Act (PPACA) to provide coverage for those with pre-existing conditions and who cannot obtain coverage.  “Less than a year ago, the Centers for Medicare and Medicaid Services estimated that 375,000 individuals would enroll in the program by the end of 2010, but it only has 12,000 enrollees.  Yet, even with this very low participation rate, the program is already financially troubled – claims in California alone are expected to be $1 billion, with the federal government paying 70 percent.  Clearly, there will not be enough to cover enrollees in all 50 states.  Once again, the health care law is not living up to its claims.”

The hearing took up another late breaking issue.  Stearns’ Oversight and Investigations Subcommittee also discovered that under PPACA, unions, corporations, and state public employee systems are receiving subsidies to cover health care costs for their early retirees.  So far, the program has spent $1.8 billion of the $5 billion set aside for these subsidies.  The United Auto Workers received $206 million, General Electric $36 million, and the California Public Employees Retirement System $57 million. 

The one witness for the hearing was Mr. Steve Larsen, the Deputy Administrator and Director for the Center for Consumer Information and Insurance Oversight.  Stearns asked Larsen, “These are corporations that are profitable…if this is a health care program that is going to work, why would you be taking taxpayers’ money and giving so much out to companies that are very successful and have a very good, profitable history?”  Larsen responded, “Those companies are companies that in fact continue to offer retiree benefits, health benefits for early retirees.”  Stearns then asked, “But shouldn’t they have the responsibility of taking care of that themselves, not ask for the taxpayers - basically giving them free money?”  Stearns later noted, “You are always going to run out of money if it’s free.”