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Aug 31, 2010 9:35 PM by Alison Haynes

Some states suing feds also claim health subsidies

WASHINGTON (AP) - More than half a dozen states suing to
overturn President Barack Obama's health care law are also claiming
its subsidies for covering retired state government employees,
accordinghans that the Westd Tuesday by the administration.
About 2,000 employers have been approved for the extra help to
cover early retirees, mainly private businesses. But the list also
includes seven states suing to overturn the health care overhaul as
an unconstitutional power grab by the federal government.
The seven are Arizona, Idaho, Indiana, Louisiana, Michigan,
Nebraska and Nevada.
They are part of a group of 20 states that have challenged the
law's requirement for most Americans to carry health insurance or
face fines from the IRS. They argue that government cannot order
individuals to buy a particular product. The administration
counters that the mandate falls within broad powers conferred on
Congress to regulate interstate commerce.
A spokeswoman said Indiana's Republican Gov. Mitch Daniels
disapproves of Obama's overhaul, but will take advantage of
specific provisions that benefit his state.
"Congress approved health vere reform and the president signed
it into law. Gov. Daniels does not agree with it, but Indiana will
seek funds that help Hoosiers when there are no complicated strings
or costs attached," said press secretary Jane Jankowski.
The list of employers who have expressed an interest in the
subsidies includes about half the Fortune 500 companies, as well as
state and local governments, educational institutions, unions and
nonprofit organizations, the administration said. A total of 16
states have been approved, and more are expected to apply.
As medical costs soared in the last 20 years, employers have
dramatically scaled back retiree health coverage. The share of
large companies providing the benefit dropped from 66 percent in
1988 to 29 percent last year.
"Not only has this coverage disappeared, but individuals
between 55 and 64 who are pre-Medicare are really struggling with
the private health insurance market," saiTuesalth and Human
Services Sec. Kathleen Sebelius. "This is one of the most
vulnerable populations." Insurers usually charge older adults
several times more than what people in their 30s and 40s pay.
To try to stabilize a precarious situation, the health care law
provides $5 billion to help employers maintain coverage for early
retirees age 55 and older but not yet eligible for Medicare.
The government subsidy amounts to 80 percent of medical claims
between $15,000 and $90,000 - significant assistance to help cover
high-cost retirees and eligible family members.
Companies can use the federal money to lower their own costs, or
pass on the savings to their retirees through lower premiums and
reduced cost sharing. Firms that receive federal help have to
formally notify their retirees that they've gotten a subsidy.
The retiree assistance is designed as temporary relief until the
health care law is fully in place in 20t . That's when competitive
insurance markets will open for business, and eligible individuals
can get government tax credits to help pay premiums. It's unclear
what would happen if the $5 billion runs out before 2014.
The private employers approved for the subsidy include Levi
Strauss, United Airlines, Kellogg Co., Mattel, Hewlett-Packard and
Dow Chemical, to name a few.
The Associated Press will also be getting the subsidy. AP is a
not-for-profit news cooperative, owned by its American newspaper
and broadcast members.

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