Employers from nearly every sector of economy applying for health overhaul's early retiree subsidies

Seven states that are suing the federal government to throw out the health overhaul are also readying to take subsidies that will help them afford medical costs for retirees, The Associated Press reports. "An administration official said Tuesday seven states suing the federal government are among 16 already approved for subsidies to help with the health care costs of early retirees. The seven are Arizona, Idaho, Indiana, Louisiana, Michigan, Nebraska and Nevada." In addition, 2,000 employers have been approved for the extra help, which provides $5 billion in total to help employers maintain health coverage for their early retirees older than 55 but not eligible for Medicare. "The government subsidy amounts to 80 percent of medical claims between $15,000 and $90,000 — significant assistance to help cover high-cost retirees and eligible family members" (Alonso-Zaldivar, 8/31).

Modern Healthcare: "The approved applications represent nearly every sector of the economy: 32% from businesses, 26% from state and local governments, 22% from union sponsors, 14% from schools and other educational institutions and 5% from not-for-profits" (Lubell, 8/31).

Bloomberg: "Businesses led by financial services company Deutsche Bank Americas Holding Corp., beverage-seller PepsiCo Inc., drugmaker Pfizer Inc., communications provider AT&T Inc., air transport company Delta Airlines Inc., and carmaker General Motors LLC qualified for U.S. funds today. 'In these tough economic times, it is difficult for employers to keep up with skyrocketing health care costs for employees and retirees,' Health and Human Services Secretary Kathleen Sebelius said in statement today." The program will run until 2014, when it ends and a competitive health insurance marketplace — as well as tax credits — is in place to provide more affordable options to early retirees and others (Armstrong, 8/31).

The Wall Street Journal: The number of companies seeking the assistance "is stoking concerns that the program will run out of money before it's due to expire ... when insurers face tighter restrictions that will prevent them from denying care to older Americans and limit how much more they can charge them than younger consumers" (Adamy, 8/31).

And, in other health overhaul news, The Hill reports that the National Association of Insurance Commissioners is close to resolving issues around the "medical loss ratio." The ratio requires insurers to spend at least 80 percent — 85 percent for large plans — on care or to reimburse customers the difference. "The health reform law tasks state regulators with defining the ratio, and the NAIC has said it plans to submit regulatory language for certification by the Department of Health and Human Services by the end of summer" (Pecquet, 8/31).

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This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.