USPS and Medicare

March 2018

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Special Delivery: New Bill Aims to Bring Postal Worker Health Care to Medicare

A bill for the costs of health care coverage for scores of current and former U.S. Postal Service workers may soon be arriving in Medicare’s mailbox.

The Postal Service has reported 11 straight years of financial loss, including a $540 million loss in the first quarter of 2018 alone.1 This reported loss comes on the heels of the Postal Service defaulting on five payments owed to the federal government to help fund health benefits for Postal Service retirees.2 

A possible solution to the problem? The Postal Service Reform Act of 2018.

The bipartisan bill was introduced to the Senate in March and includes several measures to help reverse the course of the Postal Service’s financial woes. One included measure is to transition any eligible current or former Postal Service employees onto Medicare in order to alleviate the burden of providing company health insurance for those workers.

The bill, sponsored by Senators Jerry Moran (R-Kan.), Claire McCaskill (D-Mo.), Tom Carper (D-Del.) and Heidi Heitkamp (D-N.D.), states:

“A Postal Service Medicare eligible annuitant subject to this section may not continue coverage under the Postal Service Health Benefits Program unless the Postal Service Medicare eligible annuitant enrolls in Medicare part A, Medicare part B and Medicare part D.”

The move would allow Medicare to pick up some of the health care costs incurred by eligible workers and soften the blow to the company’s own benefits plan. But it would do so at the expense of the beneficiaries, who would be on the hook for a percentage of Medicare premiums that, according to National Active and Retired Federal Employees Association president Richard G. Thissen, could total $1,600 per year.2 While most people get Part A of Medicare for free, the optional Part B and Part D come with monthly premiums.

Thissen called the bill an attempt to “balance the books of the United States Postal Service on the backs of postal retirees.” 

Some others have come out in support of the bill, such as United Postmasters and Managers of America co-presidents Tony Leonardi and Sean Acord, who said in a joint statement that the “UPMA applauds the efforts of Senators Carper, Moran, Heitkamp and McCaskill in introducing bipartisan legislation to further the goal of providing financial relief to the U.S. Postal Service.”2

A similar version of the bill was introduced to the House of Representatives in 2017 but was not voted on.

 

1U.S.P.S. Form 10-Q Quarter I FY 2018. Retrieved from http://about.usps.com/who-we-are/financials/financial-conditions-results-reports/fy2018-q1.pdf.

2Bur, Jessie. Senate bill would force Postal Service retirees onto Medicare. March 27, 2018. Federal Times. Retrieved from https://www.federaltimes.com/management/pay-benefits/2018/03/27/senate-bill-would-force-postal-service-retirees-onto-medicare.

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