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Enzi alleges political favoritism in retiree program
Sen. Mike Enzi (R-Wyo.) slammed the Health and Human Services Department for the way it has awarded funding from the healthcare law, but government auditors found nothing untoward about the process.
Enzi criticized HHS for its handling of the Early Retiree Reinsurance Program (ERRP), a $5 billion program created by the reform law to help cover retirees who are older than 55 but not yet eligible for Medicare. HHS has spent about $2.9 billion of the total funding.
Almost half of the ERRP payments HHS has approved are for state and local governments, according to a report the Government Accountability Office released Monday. Unions also controlled a large share of the funds.
“Rather than rewarding politically connected constituencies, the remaining funds in the insurance program for early retirees should be used to assist employers with providing insurance coverage,” Enzi said in a statement. “If that proves impossible, the funds should be returned to the Treasury to reduce the federal deficit.”
But according to GAO, the distribution of funds — especially the large share eaten up by governments — is “consistent with the provision of retiree health benefits in the marketplace.” Government offices offer coverage to their retirees more often than private firms, GAO said.
HHS quit accepting new applications in May because it was already on track to exhaust the ERRP’s funding before the program’s scheduled expiration in 2014. GAO confirmed that the funding is expected to run out in 2012.
Small businesses had urged HHS to set up a review process that would prevent government offices and unions from dominating the ERRP. But, according to GAO, the department set up a first-come, first-served system.
“Officials told us that the applications they received were not given preference based on any particular category of submitted information or for any other reason and were processed in the order in which they were received,” the GAO report states.
Republicans have raised similar complaints about the process through which HHS awarded waivers from the healthcare law’s limits on annual benefit caps. HHS has faced charges of political cronyism, including favorable treatment of unions, but ultimately the department granted more than 90 percent of all waiver requests.
