Shikha Dalmia in the Wash Exam on ObamaCare's Bailout of Detroit

President Obama might have no plans to bailout Detroit (if you can believe Jay Carney). But that doesn’t mean that Detroit has no plans to extract a bailout from President Obama. Part of Detroit’s plan for solvency involves dumping its young retirees onto ObamaCare’s exchange, writes Reason Foundation Senior Analyst Shikha Dalmia in the Washington Examiner:

Detroit's bankruptcy plan would give unsecured private lenders -- who include creditors backed by general obligation bonds -- only pennies on the dollar. It'll pay a considerably greater portion of the pension benefits of its 19,000-plus retirees. But their health care costs it plans to make Uncle Sam's problem.

The city currently pays for the coverage of retirees under 65 who don't qualify for Medicare. And there are plenty of them because city workers habitually take early retirement after about 25 years of service -- and either take on other jobs or do their existing job for the city as contractors. They are allowed to work for 1,000 hours annually without jeopardizing benefits.

The city will hand these young retirees an unspecified "monthly stipend" to help defray coverage costs -- and still save some $27 to $40 million annually. The balance they will obtain from Obamacare's exchange since it must subsidize everyone up to 400 percent of the poverty level.

Go here to read the whole thing.

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  • Gene||

    How about this.

    Cut the goddamn grifters loose.

  • Invisible Finger||

    Chicago is doing the same thing.

  • ||

    Right. There's no mandate that employers finance their retiree's healthcare, only current employees.
    Everyone should dump their retirees onto the exchanges.

  • Ken Shultz||

    "President Obama might have no plans to bailout Detroit (if you can believe Jay Carney). But that doesn’t mean that Detroit has no plans to extract a bailout from President Obama."

    Ultimately, that bailout money isn't coming from President Obama, though, right?

    It's coming from the taxpayers. It's coming out of your future paychecks. It's coming out of Ken Shultz's checking account, too. ...and as much as I hate government employee unions! Once again, the joke's on me.

    Obama must be laughing his ass off!

    He's laughing at all of us.

  • R C Dean||

    It'll pay a considerably greater portion of the pension benefits of its 19,000-plus retirees.

    I'm no bankruptcy expert, but I thought pensions were unsecured "general" creditors, so I'm puzzled* as to how/why this is possible.

    *Not really.

  • Ken Shultz||

    I think this is just the plan put forward by Detroit.

    I don't think the judge has to accept it, and I'm sure the bond holders will have something to say about it.

    I bet they're looking at the deal the UAW got for Chrysler employees and retirees, and the raw deal Chrysler's bondholder's got, but that was an official Obama bailout after the Obama Administration essentially seized Chrysler.

    But you know how unions think--if Chrysler's bondholder got screwed for the benefit of the UAW, then why shouldn't Detroit's bondholders get screwed for the benefit of public employees?

  • ||

    This will be awesome for causing a death spiral in the insurance markets. Lots of elderly retired public sector workers (who probably spent the careers sitting on their ass) get dumped into the insurance system, thus skewing the population toward older, sicker workers.

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