Detroit Planning to Fight Bankruptcy by Dumping City Employees into Obamacare

“That’s going to be a huge cost for the United States government, and it’s mandatory spending.”


Obamacare and Detroit. Two horrible disasters who came together at last.

When America goes bankrupt, where will we dump our Federal employees? UNCare? GloboMed? But you can see some of the forward-thinking that got Detroit where it is today.

And unions have one more reason to feel good about supporting Obamacare, which will now become an excuse for dumping public employees.

As Detroit enters the federal bankruptcy process, the city is proposing a controversial plan for paring some of the $5.7 billion it owes in retiree health costs: pushing many of those too young to qualify for Medicare out of city-run coverage and into the new insurance markets that will soon be operating under the Obama health care law.

Officials say the plan would be part of a broader effort to save Detroit tens of millions of dollars in health costs each year, a major element in a restructuring package that must be approved by a bankruptcy judge. It is being watched closely by municipal leaders around the nation, many of whom complain of mounting, unsustainable prices for the health care promised to retired city workers.

Similar proposals that could shift public sector retirees into the new insurance markets, called exchanges, are already being planned or contemplated in places like Chicago; Sheboygan County, Wis.; and Stockton, Calif. While large employers that eliminate health benefits for full-time workers can be penalized under the health care law, retirees are a different matter.

There's a moral to this story. It involves the homicide of a golden goose. Also a scorpion crossing a river.

“The Affordable Care Act does change the possibilities here dramatically,” said Neil Bomberg, a program director at the National League of Cities. “It offers a very high-quality, potentially very affordable way to get people into health care without the burden falling back onto the city and town.”

No, it offers a potential way to dump people whose health care they are obligated to cover but can't afford to do so anymore.

But if large numbers of localities follow that course, it could amount to a significant cost shift to the federal government. Authors of the health care law expected at least some shifting of retirees into the new insurance exchanges, said Timothy S. Jost, a law professor at Washington and Lee University who closely follows the law. “But if a lot of them do, especially big state and local programs,” he said, “that’s going to be a huge cost for the United States government, and it’s mandatory spending.”

Wait. So does this mean passing a giant bill that wasn't properly thought out could have terrible consequences? Nah.

And if worst comes to worst, America can just declare bankruptcy and try to put all those IRS employees onto the UN health care plan.

That's bound to work. Right?