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.