Officials at the Centers for Medicare and Medicaid Services (CMS) were right back in April when they predicted they would probably use up Early Retiree Reinsurance Program (ERRP) funding early.
CMS stopped taking ERRP applications in May because of concerns about lack of availability of funds, and now officials say in a new notice that ERRP probably will stop helping with claims incurred by the employers already using the program at the end of the year.
The drafters of the Patient Protection and Affordable Care Act of 2010 (PPACA) created ERRP and provided $5 billion in ERRP funding in an effort to help the dwindling number of employers that still provide health coverage for retirees ages 50 to 64.
ERRP, which began taking applications in June 2010, has been reimbursing participating employers for 80% of the amount of claims costing between $15,000 and $90,000 for early retirees and early retirees’ spouses, surviving spouses and dependents.
The ERRP creators supporters were hoping ERRP would help keep coverage in place for early retirees until 2014. Early retirees cannot get Medicare coverage unless they qualify for Social Security Disability Insurance benefits, and, in states that allow medical underwriting, early retirees with health problems may have trouble qualifying for conventional commercial health coverage.