[Congressional Record Volume 157, Number 74 (Thursday, May 26, 2011)]
[Senate]
[Pages S3431-S3432]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. KERRY (for himself, Ms. Stabenow, Mr. Blumenthal, and Mr. 
        Cardin):
  S. 1088. A bill to provide increased funding for the reinsurance for 
early program; to the Committee on Health, Education, Labor, and 
Pensions.
  Mr. KERRY. Mr. President, today I am introducing the Retiree Health 
Coverage Protection Act to provide an additional $5 billion for the 
Early Retiree Reinsurance Program, EERP, to allow more employers to 
participate in the program. It will also further reduce the cost of 
retiree coverage.
  I worked with Sen. Stabenow to include the EERP program in the 
Affordable Care Act due to the erosion of employer-sponsored retiree 
coverage across the country. The percentage of large firms providing 
workers with retiree health coverage dropped from 66 percent in 1988 to 
29 percent in 2009.
  The ERRP helps to control health care costs and preserve coverage for 
early retirees and their families and has been remarkably successful in 
making retiree health insurance coverage more stable and affordable.
  Employers who participate in the program can receive a reinsurance 
reimbursement of up to 80 percent of catastrophic medical claims 
between $15,000 and $90,000 for their early retiree enrollees. The 
reimbursement is used to reduce the employer's health care costs and to 
lower premiums to retirees and their families. A study from Hewitt 
Associates estimates that the program will reduce the cost of retiree 
coverage from 25 to 35 percent, anywhere from $2,000 to $3,000 per 
retiree, per year.
  The program has garnered robust participation among a wide range of 
retiree health plan sponsors from all major sectors of our economy. 
Earlier this month, it was announced that 5,515 plan sponsors have been 
approved to participate in the program and nearly $2.5 billion 
reinsurance reimbursements have been paid to 1,728 participating 
retiree plans.
  The ERRP has been so successful that the Centers for Medicare and 
Medicaid Services, CMS, announced it could no longer accept 
applications for the program after May 6 because the overwhelming 
response would exhaust the $5 billion in appropriated program

[[Page S3432]]

funding. Until additional insurance market reforms are enacted in 2014, 
we should build on the demonstrated success of ERRP.
  Senator Stabenow, Senator Blumenthal, and I are working together to 
preserve insurance coverage for millions of retirees who rely on on 
health coverage through their former employers before they become 
eligible for Medicare. That is why we are introducing legislation, the 
Retiree Health Coverage Protection Act, to provide an additional $5 
billion in ERRP funding. This additional funding could be used to allow 
more employers to participate in the program and to further reduce the 
cost of retiree coverage.
  Over 180 employers who offer retiree health benefits in Massachusetts 
have taken advantage of this program. These public and private sector 
employers in the Commonwealth represent various entities, including: 
city governments, hospitals, colleges, and financial service 
institutions.
  I would like to thank a number of organizations who have been 
integral to the development of the Retiree Health Coverage Protection 
Act and who have endorsed our legislation today, including the American 
Federation of Labor and Congress of Industrial Organizations, AFL-CIO, 
the Alliance for Retired Americans, the American Federation of State, 
County, and Municipal Employees, AFSCME, Families USA, the 
International Union, United Automobile, Aerospace & Agricultural 
Implement Workers of America, UAW, and the National Education 
Association, NEA.
  I look forward to working with my colleagues in the Senate to protect 
and stabilize retiree health coverage by ensuring the ERRP has adequate 
funding. I ask my colleagues to cosponsor this important legislation.
                                 ______