The recent announcement by Health and Human Services (HHS) that the Early Retiree Reimbursement Program (ERRP) has distributed 4.5 of its 5 billion dollar limit was not incredibly surprising. The program was created by the recent Health Care Reform legislation and was designed to reimburse organizations that offered employer sponsored benefits to pre-Medicare eligible retirees. Organizations that incurred eligible claims from these retirees could file for a reimbursement with HHS. The program was designed to address a growing concern that folks cannot retire before they are Medicare eligible without running the risk of emptying their savings on expensive health premiums in the individual market. The surprising fact to come out of the recent announcement was that over 40% of the fund, approximately 2 billion dollars, went to only 20 organizations. Some of the larger recipients were:

• United Auto Workers Retiree Medical Benefits Trust, $387.2 million
• AT&T Inc., $213.8 million
• Ohio Public Employees Retirement System, $180.1 million
• Verizon Communications Inc., $163.0 million
• California Public Employees' Retirement System, $131.4 million

The Washington finger-pointing has already begun labeling this as another government bailout, but I don’t think we should fault these organizations for taking the government up on their offer of free money. We should fault our legislators for trying to throw short-term dollars at a systemic problem, which is the dramatic, unsustainable rise in the cost of health care. The legislators wanted some immediate relief in their new Health Care Reform law, and one solution was to ease the burden of organizations offering benefits to pre-Medicare eligible retirees by offering ERRP. With 20 organizations receiving 40% of the relief, I don’t think the program produced the intended results. Furthermore, the program was supposed to last until 2014 when the health care exchanges kick in. In defense of the legislators that support Health Care Reform, these exchanges are paramount in their attempt to address the increasing cost of attaining non-employer sponsored health insurance. Whether or not these exchanges will produce their intended results, is a debate for another article.

This failed program will join several other early miscalculations in the massive Health Care Reform legislation. The most recent being the Community Living Assistance Services and Supports (CLASS) program. According to the Congressional Budget Office, CLASS Represented over 60% of the 10 year projected savings of Health Care Reform, and was recently declared fiscally unsustainable by HHS Secretary Kathleen Sebelius in a letter to congress.