Obama Administration To Assist Employers Who Provide Health Coverage For Early Retirees.

The New York Times (5/5, A14, Pear) reports, "The White House announced Tuesday that it would help pay medical bills for early retirees who have health insurance provided by their former employers." The Times adds, "In announcing the initiative, the White House tried to win broader support for President Obama's overhaul of the health care system. Opinion polls suggest that the public remains deeply divided over the merits of the final legislation, passed by Congress without Republican votes." Notably, "the program will run from June 1 of this year to Jan. 1, 2014." Commenting on the announcement, HHS Secretary Kathleen Sebelius "predicted that 4,500 employers -- 3,000 private entities and 1,500 state and local governments -- would seek federal aid under the program."

The Financial Times (5/5, Fifield, subscription required) reports that President Barack Obama spoke about the program during a meeting of the Business Council in Washington, DC, saying, "It used to be, if you worked for a big company, when you retired you could count on having health insurance until you were eligible for Medicare." Obama added, "But, one of the consequences of skyrocketing healthcare costs is that the proportion of large firms providing insurance to its retirees has been cut in half over the past two decades. So these folks are often unable to find affordable coverage on the individual market."

Bloomberg News (5/5, Armstrong) also quotes Obama as saying to the meeting attendees, "A lot of the companies in this room can apply for this assistance starting in June. ... This is going to be a welcome reform for many businesses who are trying to provide assistance for retirees." Bloomberg points out that this program "is likely to offset some of those charges," which companies like Caterpillar said they would have to take because of the new healthcare law.

Politico (5/5, Haberkorn) reports, "The Early Retiree Reinsurance Program is designed to help employers cover early retirees who find themselves in a coverage gap, struggling to find affordable insurance coverage in the individual market and not yet eligible for Medicare." HHS has been allocated "$5 billion to distribute to employers who apply, but it's unclear whether the money will be enough to meet demand." Companies "can apply for reimbursements of up 80 percent of claims costs for health benefits between $15,000 and $90,000."

According to the AP (5/5, Alonso-Zaldivar), "Effective next month, federal subsidies will allow employers to recoup a big chunk of the cost of medical claims for retirees ages 55 to 64 not yet eligible for Medicare. Older baby boomers working for large companies -- and looking to downshift to less-demanding employment -- could be immediate beneficiaries." Yet, "in the long run, experts predict that President Barack Obama's health overhaul will accelerate the decline of employer-sponsored retiree coverage, by making it easier for people to find and keep affordable coverage on their own, as well as improving Medicare benefits." CQ HealthBeat (5/5, Reichard, subscription required) also covers the story.