USPS Won't Get Medicare Drug Subsidy

Share this content:
The Bush administration denied the U.S. Postal Service's request for a Medicare prescription drug subsidy, which could have saved the agency $250 million annually.

In October, the USPS applied with the Centers for Medicare and Medicaid Services, which is part of the Department of Health and Human Services, to be a Medicare Part D provider. This would have let it receive the employer's retiree prescription drug subsidy under the Medicare Modernization Act of 2003.

The USPS said it qualified for this subsidy through its direct payment of the employer's premium to the Federal Employees Health Benefits Program that is administered by the federal Office of Personnel Management. After communicating with OPM, however, the Centers for Medicare and Medicaid Services rejected the application because the USPS participates in the Federal Employees Health Benefits Program, which is not taking the subsidy.

OPM said it decided to forgo the subsidy because there is no rationale to pay itself to continue providing drug coverage to federal retirees of agencies that are fully supported by federal tax dollars. But the USPS said it is distinct in that it directly funds the costs of its retirees' health benefits with revenue generated through postage rates, not taxpayer dollars.

"We are currently pursuing recourse around the plan sponsor issue, which was the basis used by Centers for Medicare and Medicaid Services to reverse their previous acceptance of the postal service application," USPS spokesman Jim Quirk said.

Several members of Congress supported the postal service's proposal.

Sign up to our newsletters

Company of the Week

We recently were named B2B Magazine's Direct Marketing Agency of the Year, and with good reason: We make real, measureable, positive change happen for our clients. A full-service agency founded in 1974, Bader Rutter expertly helps you get the right message to the right audience at the right time through the right channels. As we engage our clients' audiences along their journey, direct marketing (email, direct mail, phone, SMS) and behavioral marketing (SEM, retargeting, contextual) channels deliver information relevant to the needs of each stage. We are experts at implementing and leveraging marketing technologies such as CRM and marketing automation in order to synchronize sales and marketing communications. Our team of architects and activators plan, execute, measure and adjust in real time to ensure the strategy is working as needed and change things if it's not.

Find out more here »

Career Center

Check out hundreds of exciting professional opportunities available on DMN's Career Center.  
Explore careers in digital marketing, sales, eCommerce, marketing communications, IT, data strategies, and much more. And don't forget to update your resume so employers can contact you privately about job opportunities.

>>Click Here

Relive the 2017 Marketing Hall of Femme

Click the image above