WASHINGTON – The state of Indiana, dozens of schools, one of the state's largest private employers and unions will receive money under the nation's new health insurance law when early retirees file high-cost medical claims.
Indiana applied for the subsidies even though it has sued to block the health insurance law.
The 75 Hoosier employers and unions were approved by the Department of Health and Human Services to participate in the $5 billion program that will help them maintain insurance for early retirees who are 55 and older but not yet eligible for Medicare.
Fort Wayne Community Schools is among the school systems that applied and were approved.
In addition, the state of Indiana, Eli Lilly, Elkhart County, Ball State University, the state police, NiSource, Purdue University and unions representing plumbers, painters and cement masons were accepted into the program.
The program will give a nudge to people who are considering retirement but who are leery of making the move because of worries about health insurance, said Daniel Bradley, president of Indiana State University.
Bradley, who participated in a news conference with Health and Human Services Secretary Kathleen Sebelius, said this might lead to staffing flexibility that the university needs.
"The subsequent vacancies can then be reallocated to address staffing needs in growing programs," Bradley said. "The end result of the funding will be to provide our university with the ability to better meet the needs of students by shifting personnel to high-demand areas."
Sebelius said the nearly 2,000 employers and unions accepted into the program will be reimbursed for medical claims of early retirees and their spouses, surviving spouses and dependents. They will receive 80 percent of medical costs between $15,000and $90,000.
The money can be used to reduce employee health care costs, subsidize insurance premiums to workers and their families, or both.
Although Gov. Mitch Daniels has been a constant opponent of the law – "it didn't reform anything," he said in a recent video interview – the state applied for the insurance program for its early retirees.
Jane Jankowski, Daniels' spokeswoman, said that "Congress approved health care reform, and the president signed it into law. Gov. Daniels does not agree with it, but Indiana will seek funds that help Hoosiers when there are no complicated strings or costs attached."
Six other states that sued to block the health insurance law also applied for the subsidy program and were approved. The seven states are among 20 that have challenged the law's requirement for most Americans to carry health insurance or face fines from the IRS.
Employers with self-funded and insured plans are eligible to apply, including private companies, state and local governments, non-profits, religious organizations and unions that operate employee benefit plans.
As medical costs have increased, employers have reduced retiree health coverage.
"Not only has this coverage disappeared, but individuals between 55 and 64 who are pre-Medicare are really struggling with the private health insurance market," Sebelius said. "This is one of the most vulnerable populations."
The program ends on Jan. 1, 2014, when early retirees and their families will be able to choose from other insurance coverage options.
For more information
HealtCare.gov offers information about the Early Retiree Reinsurance Program.
