Early Retirees and Obamacare Redux: How Texas Teachers & Jon Huntsman Employees Are Milking the System

In August, I blogged about a little-known part of Obamacare designed to help cover the health insurance of folks lucky enough to retire years before Medicare coverage kicks in at age 65. The $5 billion proved so popular that the administration shut down the application process and its funds have gone to a wide variety of retirees in the private and public sectors. 

That program is back in the news today thanks to the AP focusing on a couple of specific beneficiaries of that program: Texas public employees (where Rick Perry rules) and Huntsman International (the family firm of the former Utah governor and GOP presidential hopeful).

The Teacher Retirement System of Texas, a statewide system for public education employees, received more than $70 million as of Sept. 22, according to the federal Health and Human Services Department. The Employees Retirement System of Texas, which covers state employees, received about $30 million.

Huntsman International, the main operating subsidiary of the family-founded chemical conglomerate, is also collecting subsidies [to the tune of about $1 million.]

The AP is interested in playing gotcha ("It highlights the gap between dire Republican rhetoric about the pragmatic impulse to cash in on a new government benefit,"), which I find less interesting than the fact of the program's existence. Here's how it works:

...more than 400,000 companies [offer medical coverage for early retirees too young to collect Medicare]. Add state and local government agencies, as well as union plans, and the number swells. Indeed, the Obama administration's subsidy program got so many applications it stopped accepting new ones after approving more than 6,000. The program pays 80 percent of the claims amount for early retirees ages 55 to 64 whose care costs between $15,000 and $90,000.

The largest beneficiary of the program is the United Auto Workers, who have snagged over $225 million so far.

"Some people have described this program as 'Cash for Clunkers,' in the sense that if you want it, you have to get in line first," said Paul Fronstin, an economist with [an insurance] research group. "There was a lot of advice given to be first in line." The original Cash for Clunkers was an Obama administration program that paid people to trade in gas guzzlers for more fuel-efficient transportation. It created a marketing sensation before running out of cash.

More here.

What can you say about a program so poorly designed that it runs out of money so fast it has to be shut down? Err, maybe it wasn't a good idea in the first place. Maybe that run on resources indicates that there's a basic design flaw that strongly mitigates the thing being put in action. I'm just spitballing here.

A couple of days ago, in a brilliant post, Matt Welch got at some of the sociological and historical laziness of Occupy Wall Street types who think that it's never been so tough to be so young and beautiful. This early retirement benefit underscores the real generational battle afoot: Between people lucky enough to be cashing out of work careers with all the bells and whistles shining brightly and the rest of us who can only look forward to working longer hours, weeks, and years with no guarantees other than reduced benefits and higher taxes. Worse still, those of us under 50 are being told that our sacrifice is part of some generational covenant so it can't be questioned even as we're being told that we'll be on our own, either via reduced benefits or fiscal implosion.

I don't mind saving for my own retirement or paying for my own health care; in fact, I want to do just that. Those of us who can pay for this stuff should do so at every stage of our lives. But I also want the ability to opt out of a system that is totally going to screw me (and my kids). Which puts me squarely with a majority of Americans, it seems.

For centuries, wealth flowed from the old and relatively rich to the young and relatively poor. Nowadays, the direction has been reversed. Via FICA taxes, the young and relatively poor give money to the old and relatively wealthy (you not only make more money when you're older, you're sitting on all sorts of assets accrued over time). Every study of Medicare and other entitlements that are not particularly means-tested shows that we can't have both a safety net and an entitlement system that sucks in huge amounts of cash and then gives it to people regardless of need. I think it would be a better world and a fairer world - and a richer world - if the government took in enough money to help the poor and indigent (whatever their age) and let the rest of us keep more of our money and make more of our choices for our futures.

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  • Suki||

    The largest beneficiary of the program is the United Auto Workers, who have snagged over $225 million so far.
    Someone alert Michael Moore.

  • Mango Punch||

    But his Daughters are hot.

  • fullmetaltrousers||

    Damn...

  • Hairy Guy||

    One of them is.

  • cynical||

    The one on the left is a man in drag, dude. And maybe the one on the right too.

  • Mango Punch||

    Fair, I should've said "Daughter is hot"

  • Paul||

    Meh.

  • GILMORE||

    That second photo keeps echoing, "Viaga freakout!!" in my mind. "I like to snort the shit and play piggyback-whore!!"

  • ||

    Nah. A real Viagra ad would have her in front, and both of them doing a "Look! No hands!" thing.

  • rather||

    "Every study of Medicare and other entitlements that are not particularly means-tested shows that we can't have both a safety net and an entitlement system that sucks in huge amounts of cash and then gives it to people regardless of need."

    How does means testing square with the 'why bother to work hard; I can get it for free' argument

  • ||

    "How does means testing square with the 'why bother to work hard; I can get it for free' argument"

    Uh, it doesn't. That's one objection a lot of us have to forced income redistribution.

  • ||

    well written,

  • ||

    What can you say about a program so poorly designed that it runs out of money so fast it has to be shut down? Err, maybe it wasn't a good idea in the first place. Maybe that run on resources indicates that there's a basic design flaw that strongly mitigates the thing being put in action.

    ________________

    Nick, that's a feature, not a bug! For Obama, running out of money to hand out is the only justification needed for taking more of yours. In liberal land, any government program that runs out of money is simply "underfunded" and thus inadequate to make the "investments" needed to "win the future."

  • romulus augustus||

    Yeah for all the bitching (now) about Bush's medicare drug plan having increased the deficit, at the time people like Sen. Boxer were decrying the fact that Bush was being too stingy.

  • Paul||

    This. If I had the energy, I'd google half a dozen government free-pile-of-money-come-n-git-it-now programs that ran out of money way faster than anyone predicted. The government always calls that a "success" due to the popularity of the program. The only failure is that the pile wasn't big enough, and so next year they'll be increasing the budget.

    England's national health service and free eyeglasses were one of the earlier versions of exactly this phenomenon. Costs and available money ran up and out in 1/100000th the time anyone predicted and the program was hailed a major success.

  • CatoTheElder||

    The apostle Paul thought it was just common sense that "the children ought not to lay up for the parents, but the parents for the children" (2 Corinthians 12:14)

    Franklin Roosevelt and the Greatest Generation thought just the opposite.

    After paying for the Greatest Generation, the Boomers just want their gubmint cheeze.

  • T||

    5 pound blocks of cheese
    Bags of groceries
    Social security
    Has run out for you and me

  • ||

    We do whatever we can,
    Gotta duck when the shit hits the fan!

    (doobedy-do-wop, say what, yeah)

  • Mainer||

    Saw that AP article on Yahoo. Pissed me off. The fact that the unions are the biggest recipients was buried halfway down the page. No bias there !

  • Hairy Guy||

    Sorry Nick, that makes way too much sense.

  • No Name Guy||

    "I think it would be a better world and a fairer world - and a richer world - if the government took in enough money to help the poor and indigent (whatever their age) and let the rest of us keep more of our money and make more of our choices for our futures."

    Tisk, tisk, tisk..... The flaw in this is that you are incapable of making your own choices. You NEED a all powerful gubmint to take care of you.

  • Lord Humungus||

    alt-caps:

    #1: Hey, look at those suckers over their paying for our SS and Medicare.

    #2: The Taxpayer isn't the only thing she likes to ride.

  • Bradley||

    What can you say about a program so poorly designed that it runs out of money so fast it has to be shut down?

    That at least it was one of those rare programs that is able to run out of cash, and shuts down after doing so?

  • Haunted Taint||

    For centuries, wealth flowed from the old and relatively rich to the young and relatively poor. Nowadays, the direction has been reversed.

    Oh come on, really? Since we're talking about the political flow of wealth here: when have the young and relatively poor ever had any political power? The insane ramp-up of SS and Medicare bennies is just the latest example of the old and elite preying on the young and broke. The only news is that the State (which is always the tool of the elite, no matter what veneer it puts on) is getting more thirsty for booty and less able to keep the sham going.

    The conservative narrative is that there's been some fundamental change in the nature of government from protector to pillager and redistributor. But there has been no such change. 'Twas ever thus.

  • Haunted Taint||

    For centuries, wealth flowed from the old and relatively rich to the young and relatively poor. Nowadays, the direction has been reversed.

    Oh come on, really? Since we're talking about the political flow of wealth here: when have the young and relatively poor ever had any political power? The insane ramp-up of SS and Medicare bennies is just the latest example of the old and elite preying on the young and broke. The only news is that the State (which is always the tool of the elite, no matter what veneer it puts on) is getting more thirsty for booty and less able to keep the sham going.

    The conservative narrative is that there's been some fundamental change in the nature of government from protector to pillager and redistributor. But there has been no such change. 'Twas ever thus.

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