[House Report 117-89]
[From the U.S. Government Publishing Office]


117th Congress    }                                   {   Rept. 117-89
                        HOUSE OF REPRESENTATIVES
 1st Session      }                                   {         Part 2

======================================================================



 
                   POSTAL SERVICE REFORM ACT OF 2021

                                _______
                                

                 July 21, 2021.--Ordered to be printed

                                _______
                                

 Mrs. Carolyn B. Maloney of New York, from the Committee on Oversight 
                  and Reform, submitted the following

                          SUPPLEMENTAL REPORT

                        [To accompany H.R. 3076]

    Pursuant to clause 3(a)(2) of rule XIII of the Rules of the 
House of Representatives for the 117th Congress, the Committee 
on Over- sight and Reform is filing this supplemental report to 
include the Committee Estimate and New Budget Authority and 
Congressional Budget Office Cost Estimate to accompany H.R. 
3076, the Postal Service Reform Act filed on July 16, 2021 (H. 
Rept. 117-89).

                           Committee Estimate

    Pursuant to clause 3(d)(2)(B) of rule XIII of the Rules of 
the House of Representatives, the Committee has included a cost 
estimate of the bill prepared by the Director of CBO under 
section 402 of the Congressional Budget Act of 1974 below.

   New Budget Authority and Congressional Budget Office Cost Estimate

    Pursuant to clause 3(c)(3) of rule XIII of the House of 
Representatives, the cost estimate prepared by CBO and 
submitted pursuant to section 402 of the Congressional Budget 
Act of 1974 is as follows:

H.R. 3076--Postal Service Reform Act of 2021

    H.R. 3076 would make several changes to the operations of 
the Postal Service (USPS) and establish new enrollment 
procedures and benefit programs for USPS employees and 
annuitants. USPS cash flows are recorded in the Postal Service 
Fund and are classified as off-budget; the cash flows of other 
accounts affected by H.R. 3076 are classified as on-budget. For 
this estimate, CBO assumes that H.R. 3076 will be enacted near 
the end of fiscal year 2021.

Changes in direct spending

    Effects on Health Benefit Programs: Title I of H.R. 3076 
would require the Office of Personnel Management to establish a 
Postal Service Health Benefits (PSHB) program for USPS 
employees, annuitants, and their dependents. The bill would 
establish special enrollment procedures for postal annuitants 
enrolling in Medicare and would require all eligible annuitants 
who participate in the PSHB program to enroll in Medicare Part 
B. Certain postal workers and annuitants could choose to remain 
in the Federal Employees Health Benefits (FEHB) program. PSHB 
plans would be required to participate in Medicare Part D and 
would receive payments and discounts related to prescription 
drugs.
    Medicare: Because H.R. 3076 would require Medicare-eligible 
annuitants participating in the PSHB program to be enrolled in 
Medicare Part B, CBO expects that more USPS retirees would 
choose to enroll in Part B than do so under current law. The 
legislation also would require PSHB plans to participate in 
Medicare Part D, and those plans would receive payments and 
discounts related to prescription drugs. As a result, CBO 
estimates, the bill would increase Medicare spending by $5.6 
billion over the 2021-2031 period.
    Postal Service Health Benefits Program: CBO assumes that 
under the legislation, health insurance premiums under the PSHB 
and FEHB programs would be calculated separately based on the 
expected health care costs of annuitants, workers, and 
dependents enrolled in each program. CBO anticipates that 
calculating premiums that way would reduce the payments that 
USPS makes to cover its share of health insurance premiums. CBO 
also expects that PSHB premiums would be lower than those for 
FEHB plans because Medicare would cover most of the health care 
costs for Medicare-eligible enrollees in PSHB plans. CBO 
estimates that USPS spending on health insurance premiums for 
active workers and their dependents would decrease by roughly 
$2.5 billion over the 2021-2031 period; those amounts are 
recorded as off-budget. CBO also estimates that federal 
spending for health insurance premiums for USPS annuitants and 
their dependents would decrease by $2.5 billion over that same 
period; those amounts are recorded as on-budget.
    Federal Employees Health Benefits Program: CBO expects that 
under H.R. 3076, spending for the FEHB program would increase 
initially but decline over the 2021-2031 period. That initial 
rise would stem from the transfer of Medicare-enrolled USPS 
annuitants and dependents from the FEHB program into the PSHB 
program. Because Medicare covers most of their health care 
spending, FEHB plans have lower costs associated with those 
enrollees. FEHB premiums would rise slightly after those 
enrollees moved to the PSHB program, CBO expects. Over time, as 
USPS workers and annuitants enroll in a PSHB plan rather than 
in an FEHB plan, CBO expects that FEHB premiums would decrease 
because non-USPS enrollees in FEHB would have lower expected 
health care costs, on average, than enrollees joining the PSHB 
program. The federal government's share of payments for health 
insurance premiums for non-USPS annuitants is recorded as on-
budget direct spending. CBO estimates that spending for such 
annuitants would decrease by $61 million over the 2021-2031 
period.
    Effects on Postal Service Operations, Postal Service Health 
Coverage: H.R. 3076 would rescind the requirement that USPS 
make annual prefunding payments to the Postal Service Retiree 
Health Benefits Fund (PSRHBF) and cancel existing liabilities. 
USPS has not made such payments in recent years and CBO does 
not anticipate that the agency will do so going forward; thus, 
rescinding the requirement would have no effect on spending. 
Instead, beginning in fiscal year 2025, USPS would be required 
to pay into the PSRHBF the difference between its contributions 
to premiums for annuitants and the net claims costs for those 
annuitants. CBO estimates that the cost to USPS would be $2.8 
billion over the 2021-2031 period. Those payments are recorded 
as off-budget direct spending by USPS and as on-budget 
offsetting receipts in the PSRHBF. As discussed above, Medicare 
would cover most of the health care costs for Medicare-eligible 
people enrolling in PSHB plans. As a result, CBO estimates, 
USPS spending on health insurance premiums for active workers 
and their dependents would decrease by $2.5 billion over the 
2021-2031 period. On net, off-budget spending by USPS resulting 
from the bill's health care provisions would increase by $332 
million over the 2021-2031 period.
    Postal Service Operations: H.R. 3076 would change the 
funding mechanism for the Postal Regulatory Commission (PRC) by 
establishing a permanent authorization of payments out of the 
Postal Service Fund, which under current law receives annual 
appropriations. CBO estimates that the provision would increase 
off-budget direct spending by about $208 million over the 2021-
2031 period. The bill also would impose various reporting and 
operational requirements on USPS and the PRC. CBO estimates 
that meeting those requirements would cost about $11 million 
over the 2021-2031 period. Taken together, the operational 
changes in the bill would increase off-budget direct spending 
by $219 million over the period.
    CBO estimates that costs to USPS and receipts from 
reimbursements would be fully offset over the 2021-2031 period; 
thus, off-budget direct spending would net to zero over that 
period. As a result, CBO expects that increases to direct 
spending over the period would be offset by spending cuts of 
$552 million in 2031, the year that CBO estimates the Postal 
Service Fund will exhaust its borrowing authority and reserves.
    Finally, the bill would authorize USPS to charge fees to 
provide services to federal agencies and to state, local, and 
tribal governments. That program might increase USPS revenues, 
but it also would add to costs. CBO does not have enough 
information to estimate the costs of such new ventures.

Changes in spending subject to appropriation

    CBO expects that under H.R. 3076, spending for the FEHB 
program would increase initially but decline over the 2021-2031 
period. Federal agencies contribute a share of enrollees' 
health insurance premiums out of their annual appropriations; 
such spending is recorded as discretionary. CBO estimates that 
on-budget federal spending for non-USPS workers and their 
dependents would decrease by $51 million over the period. Such 
spending would be subject to appropriation.
    Under H.R. 3076, the PRC's operating expenses would be 
funded from the Postal Service Fund without further 
appropriation. Assuming appropriation action consistent with 
that new funding structure, CBO estimates that the bill would 
reduce discretionary spending by $90 million over the 2021-2026 
period. Additionally, the bill would merge the PRC's Office of 
the Inspector General with the USPS Office of Inspector 
General. CBO expects that provision would not significantly 
change spending subject to appropriation.

Uncertainty

    Under H.R. 3076, the budgetary effects of the changes to 
health programs would depend on the number of postal workers 
and annuitants who chose to enroll in PSHB plans and how many 
chose to enroll in Medicare. If their decisions differed from 
those CBO has assumed, the bill's budgetary effects could be 
different as well. Additionally, it is unclear how some 
policies in the bill would be implemented. For this estimate, 
CBO assumed that the new PSHB program would become available in 
2024 and that FEHB and PSHB premiums would be based only on 
those programs' enrollees. Finally, CBO assumed that the 
agencies would enroll people in Medicare only if they met 
Medicare's eligibility requirements under current law. If 
agencies implemented H.R. 3076 in ways that differ from CBO's 
assumptions, the bill could have different budgetary effects.

Mandates

    CBO has determined that H.R. 3076 contains no 
intergovernmental or private-sector mandates as defined in the 
Unfunded Mandates Reform Act.


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