Cash-strapped jurisdictions from Detroit to Sheboygan County, Wis., are considering moving retirees into Obamacare marketplaces as a way to reduce costs.
Detroit has proposed the option as it seeks to emerge from the largest municipal bankruptcy in U.S. history.
And Chicago plans to reduce health insurance coverage for tens of thousands of retired city workers next year. The city expects those retired workers would be able to purchase government-subsidized health care through Illinois’ Obamacare exchange.
State health benefit exchanges could end up getting significantly larger than predicted enrollment numbers if this cost shift takes off. Lots of government employees retire before they become eligible for Medicare at age 65. Health plans could also end up with more older people in their state individual market risk pools than forecast, leading to higher than expected costs. However as suggested in the article, moving government retirees into the exchange marketplace may not come without a legal fight over labor contract provisions governing retirement benefits.
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