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Detroit bankruptcy could flood Obamacare exchanges

Detroit bankruptcy could flood Obamacare exchanges

Detroit is poised to become the largest American city to go bankrupt.

So what are politicians to do with city workers whose votes were guaranteed with the promise of lavish pension perks like free healthcare?

Obamacare exchanges, of course!

The retirees that cities like Detroit are trying to push into Obamacare’s health insurance exchanges could drive up the premiums in the exchanges and swell costs to the federal government, experts say.

Detroit, which has filed for bankruptcy, is trying to reduce its liabilities by pushing retirees who are too young for Medicare onto the federal healthcare exchange set up through the Affordable Care Act, the New York Times reported on Sunday. The retirees could then buy their own insurance with help from federal subsidies.

…The structure of incentives within Obamacare encourages cities to drop health benefits for retirees who do not qualify for Medicare yet, experts say.

“Essentially what you’re trying to do is shift costs to the federal government,” said Andrew Biggs, a local government pension expert at the American Enterprise Institute.

Public retirees typically have only a low to moderate income, even with their pension, meaning many will qualify for subsidies from the federal government, Biggs said.

Great, so we all get to pay for their free healthcare now!

And Detroit’s blue-city approach is a template for other progressively-headed cities like Chicago, where Mayor Rahm Emanuel will gut health insurance coverage next year for more than 30,000 retired city workers and begin shifting them to the new federal healthcare system.

Nowhere is it mentioned that the stagnant economy, groaning under the weight of Obamacare requirements, is creating a situation in which 4 out of 5 adults are near poverty and/or rely on welfare. And blue policies that condemn American energy development has further hurt retiree income with $4 plus gasoline, making it even more necessary for newly pensioned workers to go on Obamacare.

It’s the circle of strife!


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ck. my blog for Obama – Detroit connection

The country is reaping the fruits of decades of reckless spending. And voters seem to think there will be no day of reckoning.

It’s the same with alcoholics. You can snatch the bottle out of their hands only so many times before you realize you are wasting time.

Let it burn.

*sigh* A pension is not a gift, it is deferred compensation. Would you people who are so gleeful over the pensioners taking a haircut, be so happy to work for free or half-rate? Because that is exactly what would happen if the pensions be eliminated. That is pay the workers were promised for their jobs. Why do you think it’s OK to welsh on a deal?

    randian in reply to Chem_Geek. | July 30, 2013 at 9:11 pm

    That is pay the workers were promised for their jobs

    What fool relies on the promises of politicians? The workers found out said promises were empty, as they so often are. Oops!

    Why do you think it’s OK to welsh on a deal?

    There’s no means to fulfill that deal. Politicians cannot promise to make taxpayers the workers’ slaves.

    healthguyfsu in reply to Chem_Geek. | July 31, 2013 at 1:37 am

    I work for a state entity (not in MI) and I am building a pension too so believe me when I say I feel for these people and their situation.

    However, can you not see the very real wrong here? Politicians don’t care about saving people, they care about saving face. If they go bankrupt and there are no real immediate consequences, their incredible blunders are masked and dumped on future leaders. Further, this money will be robbed from some other federal entity to “pay the bills”. We are plugging so many holes in the dam that we are going to run out of fingers when instead we should be seeking higher ground for when the dam inevitably explodes.

    It’s the exact same thing that has happened with the Housing market and Clinton’s revival of the failed Carter policies on the “Community Reinvestment Act”. The title even has the same skin crawling sound to it as Obamacare’s official title…which some other future leader will inherit thanks to Obama punting it away while deep in his own territory thereby putting the game all on the line for the next squad to take the field (and take the blame).

    Musson in reply to Chem_Geek. | July 31, 2013 at 9:49 am


    The state of Michigan agrees with you. The state constitution guarantees Pensions as a civil right. So, the bankruptcy court may be excluded from modifying them.

    That means either Michigan steps up and bails out the city -or the bankruptcy court will have to take draconian measures selling off city assets and dramatically reducing current salaries.

    ConradCA in reply to Chem_Geek. | August 1, 2013 at 1:24 pm

    The unions bribed the Detroit politicians with campaign contributions and then received insane salaries, and benefits. Then they have the gaul to complain when the city can’t afford them. They should have insistated that the city pay the retirement for every worker on a yearly basis using generally accepted accounting principles.

Freddie Sykes | July 30, 2013 at 7:57 pm

RE: Four out of 5 U.S. adults struggle with joblessness, near-poverty or reliance on welfare for at least parts of their lives…

This statement is not all that shattering. The economic status of people is not stagnant. People born in any income bracket have a probability of moving thru many other brackets during their lives. Unfortunately, our culture is also in decline. Three factors that have a strong correlation with poverty, namely having children while young, having children out of wedlock and dropping out of school, are on the rise. Add to that excessive spending by government and excessive regulations and is it any wonder that our economy sucks.

    healthguyfsu in reply to Freddie Sykes. | July 31, 2013 at 1:51 am

    It’s staggeringly high…its not unsurprising that many will experience this at some point but the number is alarmingly high.

    Those who get jobs out of high school or enter the military young usually do not fit in this category.

    Also, people used to get jobs right out of college or even accept an offer before they finish…that is very rarely happening these days.

    Of course it is a stat that will always have numbers but it is not one that should be this high (at 80%).

Carol Herman | July 30, 2013 at 9:15 pm

Excuse me. What are the doctors like who practice in Detroit? Miracle workers? Or is it the end of the sewer pipe when you’re so bad there’s no place else where you can relocate?

As to bankruptcy, it’s like cancer. You can’t see it. (Until after treatment begins.) And, nobody on this earth is going to lend Detroit anything so they can “attract new business.”

Maybe, the model should be to legalize drugs. And, let Detroit build the warehouses to hold this stock?

Remember when Piers Morgan said Dee-Dee’s not stupid? I actually agree. I think she represents people who HATE our culture. And, are only looking for freebies. Cities full of such people will equal Detroit’s familiar landscape. It’s like after a nuke hits. And, before regular folk wander back in to rebuild. (Because I don’t think we’re going to be importing Zulu’s from Africa to create an “amenable” civilization that would house the Dee-Dee’s just to be sure they do others any harm.)

It would be bad enough if it was only Detroit, Chicago and a couple other cities that throw retirees onto the Obamacare exchanges but it won’t stop there. You’ll see states following suit right behind them. Look how much cash they’ll be able to free up for their “good” works. California, Illinois, New York, NYC, LA ……….the list is endless, and this will not end well. How many mismanaged blue cities and states are in this country? This will free up billions in raises to the public sector unions who’ll recycle it back to their friends in the form of campaign cash. All the while, well run red states citizens who have elected leaders responsibly pay the freight. And the beat goes on. Obamacare is working just as progs wanted it to until the US is just another third world hellhole. Why should the US be better than any other country.

    Carol Herman in reply to styro1. | July 30, 2013 at 10:47 pm

    I rather enjoyed reading Meredith Whitney’s book that all 50 states are not the same. And, while no one can foretell events, one of the things she says could happen is that instead of the blue states being “king,” it’s fly-over country that has the well run states. Affordable housing. And, all the workers any corporation could need. Without being sucker-punched by unions. Her take? We’ll see a big change coming, ahead, as the states without debt. Attractive housing prices. And, industrial growth will be where productive Americans choose to go and live.

    We already know about the sand states. (Floriduh is one of them. So, too, is Vegas.) They’re sluicing off residents, who move away. And, fewer people are coming in.)

    Will Americans learn to spot better politicians? Because the heavy debt burdens to some states are directly related to the pie-in-the-sky promises that were made. (The reason Detroit looks so ugly now, is that it let itself get raped repeatedly when America’s automobile industry was so hot.)

    Remember how they designed American cars in the 1950’s? Chrome on top of more chrome. And, big enough that it looked like you were driving along with your living room couch in front. And, in back. Gas was a quarter a gallon. Plus, at Texaco, you got free dishes. Parties like that just can’t go on forever and ever.

This would be a more accurate post if the 4 out of 5 mistake were not included. That statistic is entirely misleading…it is that 4 of 5 people may have met one of the criteria during their lifetime, not that it’s their current condition…or ever has been the current condition of 80% of the population.

As for outlandish “pension” promises that politicians have made…that’s in the make believe world of professional fraudsters. In the real world, there is not enough money to pay for their promises. I’d bet the union bosses who negotiated these deals have their own retirements well funded…it’s the stooges that supported them that get stuck. P.T. Barnum was just a bit ahead of his time.

[…] Detroit bankruptcy could flood Obamacare exchanges […]

The true endgame has revealed itself:

Given that Rahm was a part of the group who put together ObamaCare, would it be fair to say that Democrats years ago recognized the unsustainable promises they made to the public sector unions for retiree health care? In addition to the illegal aliens stiffing emergency rooms, Democrats decided to make fools out of everyone by claiming coverage for the 35 million uninsured in 2008 was a national goal of compassion. Remember, they were asserting absurdly high figures for uninsured people at the time when it was more like 15 million or so, mostly illegal aliens and twenty somethings. Even the 15 million figure was untenable since Illegal aliens aren’t entitled to government benefits and the twenty somethings didn’t want to pay for any benefits thus both sizable groups were in effect a non problem Democrats were falsely asserting who desperately needed coverage.

Now we understand the reason for the false assertion, what they really meant and refused to tell the American People was that they were going to stick the population with the bill for all those government retirees and the illegal aliens (note the lack of eligibility controls). We are told the financial solvency of ObamaCare depends mostly on young people buying the larded up plan which they don’t need because the Democrats have devised the means to cover the real groups they really wanted covered. As billed by Democrats, the young people need to pay for the old people thus creating a class war between the young and the old. But add in the double talk from 2008 around carving out $300 billion out of Medicare over the next ten years and you got a set of dots that can be connected to explain the alternate scenario.