Health and Human Services Secretary Kathleen Sebelius has released a report showing that the Early Retiree Reinsurance Program, created by the Affordable Care Act, is reducing healthcare costs for early retirees.
As of Dec. 31, 2010, more than 5,000 employers had been accepted into ERRP and more than $535 million in health benefit costs have been reimbursed through the program. Sebelius said those payments have helped benefit more than 4.5 million Americans.
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According to HHS, the funding provides financial assistance for health plan sponsors (including state and local governments), for-profit companies, educational institutions, unions, religious organizations and other non-profits to help early retirees and their families maintain access to quality, affordable health coverage. The largest share of 2010 reimbursements went to governments, including state and local governments, school districts and other local agencies, Sebelius said.
"The Early Retiree Reinsurance Program is helping to control healthcare costs and protect coverage for early retirees and their families," Sebelius said. "This program is providing critical financial relief to help states, private employers and other organizations preserve access to affordable health coverage for millions of Americans."
The percentage of large firms providing workers with retiree health coverage dropped from 66 percent in 1988 to 29 percent in 2009, according to HHS.
Many of those without employer-sponsored health coverage who retire before they're eligible for Medicare see their life savings disappear because of medical bills and the high cost of individual health insurance. Health insurance premiums for older Americans are four times more expensive than those for young adults, and the deductible is, on average, almost four times that in a typical employer-sponsored insurance plan, Sebelius said.
Read the full HHS report here.
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