Obamacare's Disastrous Debacle Might Screw Detroit's Retirees

The bankrupt city plans to dump its former workers on the dysfunctional exchanges

What was remarkable about President Obama’s Rose Garden infomercial yesterday was his complete lack of embarrassment at the debacle that is the Obamacare federal insurance exchange. His law was not just a website, he harrumphed, and it had already helped a lot of people obtain coverage through an expanded Medicaid program. What about those hitting a wall on the exchange — no, “marketplace” — should stop worrying. Why? “Because no one is madder than me that the website is not working as well as it should — which means it’s gonna get fixed.”

One group of people no doubt hoping that this presidential rage works as advertised are Detroit’s retirees.

Because of the city's bankruptcy, these former public employees are already on the hook for huge cuts to their meager annual pensions, which average about $20,000 for general workers and $40,000 for police and firefighters.

Now, Detroit’s emergency manager, Kevyn Orr, has announced that to return the city to solvency, effective Jan. 1, he will stop providing coverage to 8,000 retirees under age 65. Instead, they will receive a $125 monthly stipend to use toward private plans from the exchange. (Spouses and dependents don't get anything.) The hope was that the Affordable Care Act's subsidies would kick in for unmarried retirees making from $11,490 to $45,960 and married retirees making from $15,000 and $62,040 annually, the cutoffs for eligibility.

The stipend combined with the subsidies would allow the city to slash its unfunded health-care liabilities — which are about a third of its total debt — and most retirees to obtain coverage with minimal out-of-pocket expenses. It would be a win-win for all, except maybe for federal taxpayers, who would be on the hook for the Obamacare subsidies.

The hitch is that the Michigan exchange, like many of the 35 others run by the federal government after the states refused to build their own, has been beset by glitches. Enrolling has been a nightmare, although some reports suggest that “navigators” — trained professionals who help consumers navigate the website — have been having some luck in the last few days. Even if consumers manage to enroll, however, it’s unclear they will actually get coverage given that the exchange reportedly isn't providing accurate enrollment information to underwriters.

In the light of this, it isn't out of the realm of possibility that the Barack Obama administration might have to delay carrying out the law pending an overhaul of the exchange software platform.

Should that happen, Detroit retirees who have been kicked off the city’s coverage would have no option. They would have to join the ranks of the state’s 1.3 million uninsured. Unlike pensions, health-care benefits aren't protected by the Michigan constitution. Hence Orr doesn't have to go through formal bankruptcy court to restructure these liabilities and may be within his legal rights to wash his hands of them.

Yes, it may be hard to feel sorry for Detroit’s retirees given all the special benefits that they’ve received over the years, including an extra paycheck every year as a Christmas bonus and death benefits to ineligible families of workers. This largesse depleted the city’s pension funds and forced it into bankruptcy.

But union leaders misled rank-and-file retirees, pretending that they could rob their own future without suffering the consequences. Now the same retirees might find that Obamacare has misled them, too.

A version of this column originally appeared in Bloomberg View.

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  • Biden's Scroteplugs||

    He won.

  • sarcasmic||

    Haaaa ha ha ha ha! You reap what you sow, fuckers!

  • Carolynp||

    Soooo....agree.

  • Swiss Servator, O Luzern!||

    "But union leaders misled rank-and-file retirees, pretending that they could rob their own future without suffering the consequences."

    RICO 'em.

  • Mickey Rat||

    And scorpions sting.

  • Brian||

    Obamacare's Disastrous Debacle Might Screw Detroit's Retirees:
    The bankrupt city plans to dump its former workers on the dysfunctional exchanges

    Lately, it seems that every morning is Christmas for the dark, pessimistic side of me that relishes in tragic irony.

  • ||

    It also seems that lately every morning is anti-Christmas for Obama supporters. All the promises unkept, all the lies revealed, all the ways he is going to fuck them, it must be very unpleasant to be them.

    Good. It couldn't have happened to a stupider bunch.

  • SweatingGin||

    They're scaring me. Don't think they were even this hopped up when the Senate killed the background checks bill.

  • Ted S.||

    To be fair, didn't that happen in the days between the Boston Marathon bombing and the capture of Tsarnaev?

    Things were kind of strange for a couple days there.

  • RBS||

    I don't know how unpleasant it is. Willful blindness and all.

  • ||

    Even willful blindness can't completely stop the realization that things are not going the rainbows-and-unicorns way they expected. Especially if they get hammered on insurance costs.

    Reality is a harsh mistress, especially for the fools who so eagerly deny it.

  • larry hammond||

    Would love to think this is true, but the level of cognitive dissonance that these idiots are capable of it stunning. Unless they are directly impacted they will deny the problem and if they are directly impacted, then BOOSH, RETHUGLICANS, T-BAGGERS, KOCH.....

  • ||

    Agreed, but all the cognitive dissonance in the world won't help when you're standing on the tracks and the train is barreling down on you.

  • larry hammond||

    Agreed, but I really think a lot of modern liberals would deny the train is there and expect someone (government) to save them even if it was. Getting out of the way wouldn't even occur to most of them.

  • Lar Gand||

    The real plan is to crash our current system for a progtard utopia....the failure of obamacare or detroit is not a bug but a feature.

  • ||

    Oh Schadenfreude
    Oh Schadenfreude
    Oh how I love thee Schadenfreude.

  • Jordan||

    Judging by the physique of the typical city worker I'm acquainted with, this will really hasten the death spiral.

  • kinnath||

    Fuck Detroit

  • KimInGA||

    Why are there retirees under the age of 65? Aside from those who are disabled of course - - but I would assume they would already be on disability.

  • Ted S.||

    Because fuck you, that's why.

    Seriously, the contract probably allowed them to take a pension after, say, 30 years, which means you could have a 55-year-old (or younger) retiree taking a second job to get a second pension. Gotta love double-dipping.

  • RBS||

    Like my father in law. I want to slap him every time he bitches about his "retirement".

  • KimInGA||

    I hear ya. Every time I hear someone in my parents' generation whining about their "fixed income", I want to shake them. Our generation is paying for these pensions and SS, but will we get either? Maybe SS, but certainly less (as a % of what we paid in) than earlier generations. So many of them say that they're fiscal conservatives, but they're stubbornly blind to the fact that they're living off the future generations in a totally unsustainable fashion.

  • SweatingGin||

    Oh come on. You start at 18 as a horseshoer for the water department, maybe work in that for a few years. Become the president of your union.

    Do that for a bit, retire at 48, no problem.

  • ||

    Won't be around for PM links, so enjoy this

    I am black, I am a woman and I am a feminist. In private, I often refer to this trifecta as the holy trinity. My biological, social and chosen identities shape how I move, how I am perceived and how much space I am allowed to take up in a white-male-dominated world. In trying to put my feminism into practice, I do not always stand behind every so-called feminist issue that is mandated by mainstream white feminists. For example, feminists have made a big push to critique what is termed “slut-shaming” and to reclaim the word “slut.” They have organized nationwide marches and written hundreds of blog posts in an effort to take back the term and subvert it.
    [...]
    Racism is ubiquitous and I am keenly aware of how race and class impact different women differently. If we are going to advocate against “slut-shaming,” and for owning the word “slut,” we cannot do so without paying attention to the facts. We must ask, who are the women being defended against “slut-shaming,” and who are the women being left to defend themselves? Only white women have the privilege of reclaiming the word “slut” without facing any real social penalty. Miley Cyrus, for instance, is being hailed as a woman who is in control and liberated, unlike her black counterpart Rihanna. Rihanna does not get worshiped for owning her sexuality or her agency.

  • Ted S.||

    Miley Cyrus, for instance, is being hailed as a woman who is in control and liberated,

    Really?

  • wareagle||

    and apparently no one sees Rihanna as sexy. Trinity must mean the delusion is three times as strong.

  • Night Elf Mohawk||

    I was thinking something more like batshit crazy attention whore but, poTAYto, poTAHto.

  • Calidissident||

    Rihanna has a much more positive public image than Miley Cyrus. Not a high bar, but still

  • sarcasmic||

    Daily Mail refers to Rihanna as "the world's raunchiest pop star."

    http://www.dailymail.co.uk/new.....osque.html

    Not sure if that qualifies as a "positive public image" or not.

  • Ted S.||

    I don't see what's wrong with raunchy.

  • RBS||

    As long as it's not a slideshow right?

  • KimInGA||

    Rihanna is gorgeous but naughty and Miley is cringe-inducing and only slightly above average in the looks department (and that's WITH professional hair & makeup). I think she's got it totally backwards between these two.

  • montana mike||

    Taste is taste, I don't think Rhianna is anything other than hype, but agree that Miley is hyped more than Rhianna.

    I don't really know what either of these young ladies bring to the the table, in the long run nothing so why is this even an object of discussion.

  • RBS||

    My biological, social and chosen identities shape how I move, how I am perceived and how much space I am allowed to take up in a white-male-dominated world everything I do and say.
  • Brian||

    I am black, I am a woman and I am a feminist. In private, I often refer to this trifecta as the holy trinity. My biological, social and chosen identities shape how I move, how I am perceived and how much space I am allowed to take up in a white-male-dominated world. In trying to put my feminism into practice, I do not always stand behind every so-called feminist issue that is mandated by mainstream white feminists. For example, feminists have made a big push to critique what is termed “slut-shaming” and to reclaim the word “slut.” They have organized nationwide marches and written hundreds of blog posts in an effort to take back the term and subvert it.
    [...]
    Racism is ubiquitous and I am keenly aware of how race and class impact different women differently. If we are going to advocate against “slut-shaming,” and for owning the word “slut,” we cannot do so without paying attention to the facts. We must ask, who are the women being defended against “slut-shaming,” and who are the women being left to defend themselves? Only white women have the privilege of reclaiming the word “slut” without facing any real social penalty. Miley Cyrus, for instance, is being hailed as a woman who is in control and liberated, unlike her black counterpart Rihanna. Rihanna does not get worshiped for owning her sexuality or her agency.

    Translation: I HAVE TOO MUCH FUCKING FREE TIME. GIVE ME SOMETHING POINTLESS TO OBSESS OVER, PLEASE.

  • fdog50||

    I was surprised that this was in Salon. The writing was so stupid I was convinced it had appeared in Jezebel.com.

  • montana mike||

    lolz, it's so fucking obvious, give me a moment while my head explodes.

  • montana mike||

    Fucking hilarious, Rt, in the long run we are fucked. I'm sad that my young nieces will get hosed and they don't even know what's coming.

  • larry hammond||

    Karma bitches. When you forcibly butt rape enough people for long enough expect a long line when it is your turn.

  • carol||

    Union benefit plans are in serious trouble. That union workers will get dumped on ObamaCare is a feature, not a bug, as far as the union bigwigs are concerned. Union pension funds are woefully underfunded which is why Trumka is threatening to primary any Democrat who votes for cuts in Social Security. Anything that can't last forever won't.

  • Boisfeuras||

    As Karl Marx (fittingly) said:

    Hegel remarks somewhere that all great world-historic facts and personages appear, so to speak, twice. He forgot to add: the first time as tragedy, the second time as farce.
  • juliajuli27||

    my best friend's step-aunt makes $73/hr on the laptop. She has been out of work for 6 months but last month her paycheck was $21645 just working on the laptop for a few hours. go
    ===========================
    http://WWW.Works23.Com
    ===========================

  • petarmark4||

    like Walter explained I am taken by surprise that a single mom able to profit $5487 in four weeks on the internet. visit their website
    http://WWW.JOBS72.COM

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