As the House of Representatives votes to defund the Patient Protection and Affordable Care Act (PPACA), local government officials of all political stripes may have a substantial financial incentive to put the brakes on their federal leaders.
Yesterday the SF Gate featured a report claiming that Obamacare may be a blessing in disguise to public agencies that struggle with skyrocketing pension obligations.
It has been well-established that A) city and county leaders have promised their workers generous pensions in the form of lifetime healthcare benefits; and B) most public agencies have neglected to pre-fund these healthcare liabilities. This places them in quite a fiscal predicament. However, Obamacare may provide these leaders with a silver lining.
Business Insider Editor Josh Barro suggests that local government leaders can now tell their under-65 retirees to purchase health plans within the PPACA exchange instead. Agencies could offer their employees stipends—to offset the cost of the exchanges—at a much lower rate than paying for the plans themselves.
Detroit has already adopted a version of this plan that will cut liabilities by 80%.
Read the full article here. It is an interesting new development in the continuing narrative of how Obamacare will affect California’s local government scene.