USPS responds to opinion piece in The Hill

August 14, 2017 

Ross Marchand’s opinion piece in The Hill engages in misleading criticism of certain aspects of the Postal Reform Act of 2017, H.R. 756. In fact, the bill’s requirement that postal annuitants enroll in Medicare is a necessary and sensible reform that will help to ensure that the Postal Service can continue meeting the mailing and shipping needs of the American people in a self-sufficient, business-like manner into the future.

It’s important to understand that the Postal Service did not choose its current pension and health care systems — they are the result of statutes enacted by Congress. While the Postal Service’s post-retirement benefits are well funded compared to the rest of the Government and many private sector businesses, declining mail volumes mean that the current pension and health care systems and unique pre-funding requirements imposed by Congress are unaffordable. That is the reason postal reform legislation is both necessary and urgently needed.

Requiring all postal retirees to enroll in Medicare, H.R. 756 would ensure the Postal Service’s retiree health benefits program aligns with private sector best practices. In this regard, it is a universal practice for businesses that still provide retiree health benefits to fully integrate with Medicare. Indeed, the Postal Service and its employees have paid more than $31 billion in Medicare taxes. While most postal annuitants enroll in Medicare, some annuitants do not, to the detriment of the Postal Service and those who do enroll. H.R. 756 simply requires that all postal annuitants take advantage of the Medicare benefits for which they, and the Postal Service, have paid.

While it is true Medicare spending under H.R. 756 would increase, that fact has to be considered in the context of Medicare as a whole. The Congressional Budget Office (CBO) estimates enactment of H.R. 756 would increase Medicare spending, averaging approximately $1 billion per year over the next ten years, which is less than half a day’s claims, and less than 1 percent of the total annual claims, while annual Medicare spending was $679 billion in 2016. In addition, when the entirety of H.R. 756’s various provisions are taken into account, CBO scores the bill as having an overall positive impact on the unified Federal budget by $6 billion.

The bill also protects the interests of postal workers and non-postal enrollees in the Federal Employee Health Benefits Program (FEHBP). CBO notes current postal employees and postal annuitants would have lower FEHBP premiums under H.R. 756. While current postal annuitants who are not enrolled in Medicare would become subject to the Part B premium, they would not be required to pay any penalty for failing to enroll in Part B when first eligible. (Mr. Marchand incorrectly states postal annuitants would be exempt from Part A premiums under the bill after this transition period). Additionally, CBO has determined H.R. 756 would lead to lowerpremiums for non-postal enrollees in FEHBP.

Studies consistently show the Postal Service is one of the most efficient posts in the world. Moreover, the Postal Service is self-funded and postal operations are paid for with proceeds from the sale of postal products and services — not tax revenue. In seeking to integrate its retiree health benefits program with Medicare, the Postal Service is not shirking its responsibilities, but simply asking to be permitted to adopt best practices that would ensure its retiree health benefits program is affordable and would protect against any risk that those benefits cannot be funded going forward.

The Postal Service’s financial situation, which is the result of declining mail volume and costs largely outside of the Postal Service’s control, is serious but solvable. Continued innovation and aggressive management actions — together with the passage of the provisions of H.R. 756 into law and a favorable outcome in the Postal Regulatory Commission’s 10-year review of the Postal Service’s pricing system — will restore the organization to financial stability and permit us to continue to provide excellent service to the American public.