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Policy: Entitlements

Postal Service’s financial plan: Make Medicare pay our bills

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Beltway Confidential,Joel Gehrke,Medicare and Medicaid,Entitlements,Analysis,GAO,Postal Service

United States Postal Service’s have a plan to escape the cost of their retiree pension plan, according to a new government report, but it comes at the expense of the already-embattled Medicare program.

“The primary policy decision for Congress to make with respect to USPS’s proposed health care plan is whether to increase postal retirees’ use of  Medicare, which is already facing funding challenges,” the Government Accountability Office reports. “This is because USPS’s proposal would essentially decrease USPS costs but increase Medicare costs.”

USPS is on the hook for $54.6 billion for retirees’ health benefits. It also has reached it’s legal debt limit and doesn’t make enough money on mail to cover it’s costs, according to GAO. The plan submitted for congressional review, though, simply transfers costs from one part of government to another.

“Most of  USPS’s financial gains are achieved by increasing the use of Medicare,  both by increasing enrollment in Parts A and B and gaining Medicare subsidies for prescription drug coverage under Part D, thereby increasing Medicare spending,” GAO explains.

“USPS projected that its plan would increase the more than $550 billion spent annually for Medicare by $1.0 billion in the first year of its proposed health plan and an average of roughly $1.3 billion annually in the first 5 years of its health plan—about 0.2 percent of Medicare’s annual costs,” the report also notes, but neither the White House Office of Management and Budget nor the Center for Medicare and Medicaid Services has completed a cost estimate.

 

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