Federal health insurance aid starting to flow

The Obama administration announced yesterday that nearly 2,000 businesses, labor unions and state and local governments have qualified for federal subsidies to offset the cost of providing their retirees and dependents with medical insurance, another early benefit of the new health care law.

Among those taking advantage of the new program are more than half of the nation's Fortune 500 companies, many of the major unions and governmental bodies in every state, according to the administration.

Several states that are suing to overturn the health care law are among those that plan to seek the new aid, including Alaska, Arizona, Idaho, Indiana, Louisiana, Michigan, Nebraska and Nevada. All but Louisiana are represented by Republicans in the lawsuit challenging the law.

Democrats added the $5 billion program to the health care law to encourage employers to keep their insurance plans for retirees between 55 and 64 until 2014, when the law will guarantee that all Americans can buy insurance.

Employers and unions that offer retiree plans will be able to get reimbursed for 80 percent of an individual's medical claims between $15,000 and $90,000 per year.

It is unclear if the amount of money set aside for such aid will last until 2014, however. A report by the nonpartisan Employee Benefit Research Institute estimated in June that the $5 billion fund for the program would be exhausted in 2012.

If that should happen, Congress would likely have to appropriate more money to keep the program operating.