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Letter to the Senate Supporting the Retiree Health Coverage Protection Act

May 20, 2011

Dear Senator:


The National Education Association (NEA) would like to express our support for the Retiree Health Coverage Protection Act, being introduced by Senators Kerry and Stabenow.  This important legislation would provide an additional $5 billion in funding for the Early Retiree Reinsurance Program (ERRP). 

The ERRP program, created under the Affordable Care Act, helps people aged 55 and older who are not eligible for Medicare obtain insurance by supporting employer-based plans that cover early retirees.  Early retirement health benefits are critical for educators, many of whom retire before they are eligible for Medicare.  In addition, some of our retired members have not paid the Medicare tax or Social Security Income tax and are, therefore, not eligible for Medicare Part A benefits.  Retirees not eligible for Medicare face particular difficulty in obtaining affordable health coverage.  Outside of an employer-based plan, they face premiums in the individual market that are substantially higher than those paid by younger individuals, and those with serious illnesses are often denied coverage.  It is important to shore up employer coverage for these retirees.

Demand for the assistance provided by the ERRP has been high since it was initiated in June 2010.  According to the Centers for Medicaid and Medicare services, the program has supported the coverage provided to millions of individuals — including retirees from schools and other educational institutions, state and local governments, union plans, for-profit companies, nonprofit entities, and religious organizations.  Ninety-seven percent of funds disbursed in 2010 were used in whole or part to help reduce health insurance costs for retirees and their families. 

Unfortunately, as a result of the overwhelming response, ERRP applications are no longer being accepted, as the program is expected to run out of funds next year.  By restoring funding to the original S10 billion level included in the House-passed health reform bill and the bill passed by the Senate HELP Committee, the Retiree Health Coverage Protection Act would help secure the availability of this program for retirees who need it.

Sincerely,

Kim Anderson           
Director of Government Relations

 Mary Kusler
Manager of Federal Advocacy