ObamaCare Abuse

Rahm Emanuel’s parting gift to national taxpayers upon leaving Washington two years ago was a $1 trillion bill for ObamaCare. Now the Chicago Mayor may add billions more to the tab by dumping his city’s retirees on the federally subsidized state health exchange.

The city is running a $370 million budget deficit, which will blow up in 2015 when a $1.2 billion balloon payment for pensions comes due. The bill for retiree health benefits is $194 million this year and will grow to $540 million by 2023. Actuaries have recommended that the city sock away $2 billion this year to finance future benefits and pay down a $23 billion unfunded liability. Meanwhile, Chicago’s pension funds, which are projected to run dry by the end of the decade, are scraping the bottoms of their barrels to pay for retiree health benefits.

Enter the Mayor’s commission. The four-member panel issued a report this month suggesting that dumping pre-Medicare retirees onto the state’s ObamaCare exchange in 2014 could be fab for retirees and city taxpayers. Nearly 60% of retirees and 94% of those who receive subsidies would pay less for their health care on the exchange. Chicago and its pension funds in turn would shed $23 billion in liabilities, assuming supplemental benefits for Medicare recipients are also cancelled.

On the other hand, the cost to national taxpayers would be enormous, especially if other local and state governments joined the party. Federal subsidies for Chicago retirees would amount to $44 million in 2014 and increase as more workers retire in their early to mid-50s and health costs grow. All told, state and local governments are on the hook for between $700 billion and $1.5 trillion for retiree health benefits, and like Chicago most will soon be unable to afford even their minimum annual payments.

The Chicago report illustrates once again how ObamaCare provides a convenient mechanism and incentive for employers to transfer health-care liabilities to national taxpayers—and how the costs will explode beyond Washington’s projections.