Comments on: Can Obamacare provide relief to distressed American cities? Bridges, budgets, bonds Mon, 24 Nov 2014 00:29:08 +0000 hourly 1 By: Mark_Whitcher Fri, 17 May 2013 18:22:28 +0000 The short answer is yes, Obamacare can provide OPEB relief to some distressed cities but only from the portion of OPEB attributable to pre-Medicare retirees (typically, those under the age of 65).

There are some provisions of the Affordable Care Act that apply to Medicare retirees but, for the most part, the law does not apply to them. The public exchanges or marketplaces being established under Obamacare to offer health insurance policies will not have plans for Medicare retirees.

Private exchanges that do offer Medicare Advantage plans and Medicare Supplement plans are not a panacea either (see related article: d-health-and-the-medicare-exchange-model  /#more-563). They can lead to confusion from overwhelming choice and plan churn fueled by higher commissions in the first year. Another drawback to private Medicare exchanges is they must offer group policies. They cannot offer individual polices linked to an employer funded HRA and avoid the ACA penalties.

Municipalities seeking to reduce OPEB significantly without slashing benefits or transferring costs onto retirees must follow other strategies including maximizing subsidies under the Medicare Modernization Act of 2003 and leveraging the private sector with nationwide competitive bidding.