Latest Postal Reform Bill Dumps Spending on Medicare

By Gloria Taylor

The United States Postal Service (USPS) has had its fair share of problems over the last decade, from a 40 percent drop in first-class mail to a loss of nearly $57 billion dollars.

The latest response from Congress, the Postal Service Reform Act of 2017 (H.R. 756), is still making its way through the House of Representatives. The bill deals specifically with the billions of dollars in unfunded health care liabilities the USPS owes its current and former employees.

This legislation, much like the GOP’s plan to repeal and replace Obamacare, does not seriously put decisions back in the hands of patients or lower health care costs. It requires postal annuitants to pay an additional Medicare premium despite the fact they already have insurance through Federal Employee Health Benefits Program (FEHBP), and unnecessarily drives up health care spending at an average of about $4,000 per person a year through “wraparound” coverage.

The plan also dumps $50 billion of USPS unfunded liabilities over to Medicare, clearing the liabilities from the USPS balance sheet but not dealing with the obligation itself. It merely transfers the spending over to Medicare, a government health care program that already overwhelms and underpays doctors, and is currently on a path to fiscal insolvency.

Medicare needs serious free-market reforms, not additional unfunded liabilities. Putting taxpayers on the hook for the health care services of USPS employees is the wrong approach. Congress should refocus postal reform, and Medicare reform, on lowering costs by offering additional choice, not shifting costs around or driving them up. This bill misses that mark.

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