The Centers for Medicare and Medicaid Services says it will stop accepting applications for the Early Retiree Reinsurance Program in May because of lack of availability of funds.
CMS plans to publish a notice about the change Tuesday in the Federal Register.
The ERRP, created by the Patient Protection and Affordable Care Act (PPACA), is supposed to reimburse eligible employers for part of the cost of providing health coverage for retirees ages 50 to 64 and for those early retirees’ eligible spouses, surviving spouses and dependents.
ERRP is supposed to help the early retirees get and keep coverage from now until 2014, when other PPACA provisions are supposed to require health carriers to sell coverage to all consumers, including early retirees, on a guaranteed-issue, mostly community-rated basis.
If PPACA provisions take effect as written and work as backers hope, carriers will be able to charge older consumers more than they charge younger consumers, but they will not be able to use an individual’s health status when deciding whether to issue coverage or when setting rates.
Congress appropriated $5 billion in funding for ERRP, and CMS started taking applications in June 2010.