The outlines of the latest postal reform effort on Capitol Hill are starting to take shape, with the House Oversight and Reform Committee—the panel with main jurisdiction over the USPS—saying that initial priorities will be “to relieve the financial burdens under which the Postal Service is currently operating and to enhance transparency regarding performance.”
In a preview of hearings set for this week, the committee mentioned two often-proposed ideas: relieving the USPS of the obligation to pre-fund health insurance for its retirees and mandating that USPS retirees enroll in Medicare Part B (non-hospital services).
The pre-funding requirement has been controversial since it was first imposed by the most recent major postal reform law, enacted in 2006. That law required payments of up to $5.8 billion per year over 10 years, with “pay as you go” funding afterward. However, the USPS did not make any of the required payments after 2010, with the rest showing as a debt in its financial accountings.
While not presented in detail, prior proposals for so-called “Medicare integration” would have effectively shifted some retiree medical costs from the FEHB program—for which the USPS pays the majority of premium costs as the employer—to the Medicare program. For retirees with both, Medicare becomes the first payer but not all federal retirees enroll in Part B because they view the Part B premiums as an unneeded cost for largely duplicative care. Earlier proposals have called for a subsidy, to be phased out over several years, to help retirees pay the additional cost of the Medicare premiums.
The transparency provision also is not detailed, although the announcement suggested that it would relate to service delivery standards.
“The committee recognizes that there are many additional proposals to reform both the finances and operations of the Postal Service and will consider those as the legislative process moves forward,” it added.