Obamacare Is Double Trouble for Detroit Retirees
The whole point of Obamacare was to make it easier for vulnerable Americans to obtain health coverage. But unless the federal insurance exchanges are fixed soon, the law might wallop some people at their most vulnerable moment: Detroit’s retirees.
Because of the city's bankruptcy, these former public employees are already on the hook for huge cuts to their meager annual pensions, which average about $20,000 for general workers and $40,000 for police and firefighters.
Now, Detroit’s emergency manager, Kevyn Orr, has announced that to return the city to solvency, effective Jan. 1, he will stop providing coverage to 8,000 retirees under age 65. Instead, they will receive a $125 monthly stipend to use toward private plans from the exchange. (Spouses and dependents don't get anything.) The hope was that the Affordable Care Act's subsidies would kick in for unmarried retirees making from $11,490 to $45,960 and married retirees making from $15,000 and $62,040 annually, the cutoffs for eligibility.
The stipend combined with the subsidies would allow the city to slash its unfunded health-care liabilities -- which are about a third of its total debt -- and most retirees to obtain coverage with minimal out-of-pocket expenses. It would be a win-win for all, except maybe for federal taxpayers, who would be on the hook for the Obamacare subsidies.
The hitch is that the Michigan exchange, like many of the 35 others run by the federal government after the states refused to build their own, has been beset by glitches. Enrolling has been a nightmare, although some reports suggest that “navigators” -- trained professionals who help consumers navigate the website -- have been having some luck in the last few days. Even if consumers manage to enroll, however, it’s unclear they will actually get coverage given that the exchange reportedly isn't providing accurate enrollment information to underwriters.
http://www.bloomberg.com/news/2013-10-16/obamacare-is-double-trouble-for-detroit-retirees.html
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