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Subject: qotd: GAO report on USPS Retiree Health Benefits Fund
Date: Thu, 27 Dec 2012 13:35:03 -0800
From: Don McCanne <email@example.com>
To: Quote-of-the-Day <firstname.lastname@example.org>
GAO (U.S. Government Accountability Office)
December 4, 2012
U.S. POSTAL SERVICE
Status, Financial Outlook, and Alternative Approaches to Fund Retiree
The Postal Service Retiree Health Benefits Fund (PSRHBF) covered about
49 percent of the U.S. Postal Service's (USPS) $94 billion retiree
health benefit liability at fiscal year-end 2012. USPS's deteriorating
financial outlook, however, will make it difficult to continue the
current prefunding schedule in the short term, and possibly to fully
fund the remaining $48 billion unfunded liability over the remaining 44
years of the schedule on which the 2006 Postal Accountability and
Enhancement Act (PAEA) was based.
USPS is intended to be a self-sustaining entity funded almost entirely
by postal ratepayers, but its financial losses are challenging its
sustainability. GAO has testified that USPS should prefund its retiree
health benefit liabilities to the maximum extent that its finances
permit, but none of the funding approaches may be viable unless USPS has
the ability to make the payments. USPS's default on its last two
required PSRHBF payments and its inability to borrow further make the
need for a comprehensive package of actions to achieve sustainable
financial viability even more urgent.
USPS agreed that comprehensive reform is necessary to achieve financial
sustainability. It also recognized its obligation to provide effective,
affordable health benefits to its employees and retirees, but said that
it does not have the financial resources to make prefunding payments
required by current law.
Comment: Linking health insurance to employment has contributed greatly
to the dysfunction of health care financing within the United States. If
it were a good method, you would think that the United States Postal
Service would provide an exemplary model for such financing.
This GAO report confirms that none of the proposed funding approaches
for the Postal Service Retiree Health Benefits Fund may be viable unless
USPS has the ability to make the payments. The USPS has responded in
writing that "it does not have the financial resources to make
prefunding payments required by current law."
It is long past time to take the employer out of health care coverage
and financing decisions. Instead, we should establish our own single
universal risk pool funded equitably through the tax system. Employers
could get on with the task of managing their own businesses, while our
public stewards would take charge of managing more efficiently and more
assuredly health care financing for all of us.