Medicare Under Attack from Postal 'Reform' Effort

It’s no mystery that Medicare is on track for insolvency in just a few short years. Yet this more-bonkers-than-usual Congress is on track to make things worse this week by passing legislation that will add more people to the Medicare rolls with no way to pay for it.

As much as I would like to solely blame Speaker Nancy Pelosi and woke Democrats, I can’t because some Republicans are on board with the nonsense. The problem stems from a bipartisan bill to “reform” the United States Postal Service (USPS).

The legislation in question would create a new program within Medicare for USPS retirees. This is great for the USPS because they wouldn’t have to pay for core retiree health care costs anymore. Yet it is not so great for taxpayers who will end up footing the bill for a cost that should remain the responsibility of the USPS.

Reforming the USPS has long been a goal of Republicans whereas Democrats have traditionally favored straight-up bailouts. The 2020 House “infrastructure” bill included a $25 billion bailout for the USPS. The CARES Act contained $10 billion in USPS aid. Now comes a sneaky backdoor bailout whereby the USPS can dump retirees into Medicare to take liabilities off their books to get closer to the appearance of profitability. Presto! Why there are actually some Republicans going along with this is a mystery.

While most of us (self included) love and respect our mail carriers and want to see a functional and efficient USPS, sometimes it seems like it is just not meant to be. When we look at the history of the postal service, we see a long, sad trail of bad decisions and squandered resources. According to Postmaster General and CEO Louis DeJoy, the USPS is expected to lose $160 billion over the next ten years. And when you look back, you see consistent annual debt incurred by the USPS of tens of billions of dollars. If you look at the past ten years and projections into the future, the USPS will not be viable much longer without serious reform. An accounting gimmick that takes liabilities off the balance sheet is neither serious nor reform.

Related: Medicare is Running Out of Money 

The legislation in question is H.R. 3076, the Postal Service Reform Act of 2022. Title I of the bill, Postal Service Financial Reforms, creates a new program in Medicare called the Postal Service Health Benefits (PSHB) program. It is unique for postal employees and will treat them differently than all the other people in Medicare. 

The Congressional Budget Office (CBO) concluded that this “reform” bill will “increase Medicare spending by $5.6 billion over the 2021-2031 period.” This is at a time when, as The Federalist reports, “the proposal would shift individuals from a postal retiree program scheduled for insolvency in 2030 into a Medicare program scheduled for [official] insolvency in 2026.” This hardly sounds like a reform.

The truth is that Congress is hoping nobody will notice that the bill will take health care spending off the postal service books and move it to a program on pace to go belly up in 2026. Moving expenses from one account to another would not count as a savings for average American families, yet in Washington they call that “reform.” In the end, when Medicare becomes insolvent and the USPS deeper in the hole, these same politicians in Washington will come to Americans to demand tax increases to pay health care expenses for the elderly that will be tough to oppose.

We should not be surprised. The same Congress that has racked up close to $30 trillion in national debt over our nation’s history can be credited with a deficit for this past year exceeding $2 trillion. If the average family looked at their spending over the past few years and found that they had spent 100 thousand dollars more than they earned, there would be severe and immediate consequences for not reforming their spending habits. It’s a pity that our Congress seemingly gives no rips about the longer term consequences of anything they do nowadays.