When Can I Retire From The Post Service And Keep My Health Insurance

A Us Postal service employee unloads postal service at a facility on February 10, 2022 in Houston, Texas. On Feb viii, the Business firm of Representatives passed the Postal Service Reform Human action of 2022 (H.R. 3076). The legislation will address operational and financial issues that the bureau has been grappling with for years. Brandon Bell/Getty Images hibernate caption

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Brandon Bell/Getty Images

A United states of america Postal service employee unloads mail service at a facility on Feb 10, 2022 in Houston, Texas. On February viii, the Firm of Representatives passed the Mail Reform Deed of 2022 (H.R. 3076). The legislation volition address operational and financial issues that the agency has been grappling with for years.

Brandon Bell/Getty Images

A long-awaited bill to fix the nation's deteriorating post is on the verge of passage in the Senate, but it could come up at the expense of an fifty-fifty bigger and more complicated problem: Medicare solvency.

The Postal Service Reform Act of 2022 would assist shore up post office finances by ending the unusual and onerous legal requirement to fund 75 years of retirement health benefits in advance. In return, information technology would require future Postal Service retirees to enroll in Medicare.

According to the Congressional Budget Role, the move could save the postal retirement and health programs well-nigh $5.6 billion through 2031 while adding $v.5 billion in costs to Medicare during that span, and probably much more in after years.

Because the massive size of Medicare — it spent $926 billion in 2020 — the costs don't amount to much. That small financial bear on, and the ongoing firsthand crises with mail delivery, probably account for the strong bipartisan back up the postal beak has received in Congress, with 120 Republicans joining Democrats to pass the neb in the House on February. eight.

But late in the process, some lawmakers are raising alarms over the motion, arguing that maybe Congress should look more carefully at the financial impact to Medicare'south trust fund, which is expected to run dry out in 2026.

"This bill simply shifts risk to Medicare recipients past adding billions of new costs to Medicare," Sen. Rick Scott, R-Fla., said Feb. 14 in blocking requests on the Senate floor to expedite passage of the bill. Scott'due south objection delayed consideration of the beak until early on March, after the Senate returns from its Presidents Mean solar day interruption.

Currently, Postal Service employees are covered by plans offered in the Federal Employees Health Benefits program. When they retire they have several choices for health care, including staying in their original program or switching to Medicare every bit their primary coverage and having an FEHB plan serve as supplementary coverage. About 20% of postal retirees practice non sign up for Medicare, preferring their current federal plan. Under this legislation, they would accept to switch to Medicare, but they would keep a new Postal Service version of the FEHB plan every bit secondary coverage.

Since the modify wouldn't fully take effect until 2025, and the Congressional Budget Office'due south cost gauge doesn't capture a full decade, Scott wants to know the price tag for the next 10-and 20-year periods, as well as the specific impacts on the various components of Medicare, such every bit premiums for Medicare'due south Office D drug programme and the Part B program, which covers a multifariousness of outpatient services.

The overall cost is likely to exist much more significant than the shorter-term analysis establish, said Robert Moffit, a senior beau at the bourgeois Heritage Foundation, who has also raised concerns.

"There is a total cost that'southward being ignored," Moffit said. "You basically accept a situation where you have unfunded liabilities in the Postal Service Health Benefits Program, retiree benefits, that amount to most $75 billion."

That projected cost doesn't vanish. It falls on Medicare, though the exact impact is unclear. Moffit agreed with Scott that Congress should be looking at longer-term implications, including effects on premiums and the costs borne by taxpayers and beneficiaries.

"Nosotros ought to step back, accept a deep breath, and look at what we're doing here," Moffit said.

Postal service unions are not worried about the modify, nevertheless, with all of them supporting the switch, noted Democrats who responded to Scott earlier this month.

Senate Majority Leader Chuck Schumer argued that the bill would relieve the regime money overall, and that moving postal retirees into Medicare would ensure that they receive benefits they've paid for but were non using.

For Schumer and most other lawmakers, the comparatively small impact on Medicare is but not every bit pressing as getting the mail service delivered on time.

"We will pass this bill considering America needs it. Rural people demand it. Senior citizens need it. Veterans need it — eighty% of the veterans' prescriptions are sent through the postal service," Schumer said. "Nobody should be continuing in the manner of this pecker."

Scott is at present amidst a minority objecting to the latest effort and pointing to Medicare.

Others who remain concerned about Medicare's poor finances also thought fixing the problems with postal commitment was worth the cost to Medicare.

"I would let Congress have a small win here and, really, this is non just a small win," said Mary Johnson, a Social Security and Medicare policy annotator at the Senior Citizens League advocacy group.

She said the failures of the post organization also have health consequences, with payments for insurance and shipments of prescriptions going missing, which has happened to her.

The shift to Medicare envisioned in the legislation could add to the sense of urgency — all those retired postal workers would be joining Medicare merely in fourth dimension for a solvency crisis if Congress drags its anxiety. "It'due south inaction in Congress that would crusade that," Johnson said.

Johnson noted it will exist difficult to reach a bipartisan consensus on something equally momentous as Medicare reform. "You're going to have to laissez passer something, and it depends on who'due south the bulk. It may not be very pretty when information technology happens."

KHN (Kaiser Wellness News) is a national newsroom that produces in-depth journalism nearly wellness issues. It's an editorially independent operating program of KFF (Kaiser Family Foundation).