Detroit Looks at Obamacare to Lessen Debt

The city hopes its plan to ease retiree health costs is approved by the bankruptcy judge.

Posted: 07/29/2013 04:45 PM EDT

Detroit has proposed a plan to restructure some of its debt through Obamacare. If approved the plan aims to chip away at its $5.7 billion debt in retiree health costs by moving those considered too young to qualify for Medicare out of city-provided coverage and into the new insurance market exchange.

Detroit has more than 19,000 retirees according to the New York Times, which is double the amount of people currently working — of which 7,500 of them are younger than 65. The city has proposed to offset the cost of health insurance bought through the exchange by providing a small monthly stipend to retirees. However, some retirees worry that the coverage may not be as generous as it has been through city plans.

But officials believe that the old health insurance model is no longer feasible and said the plan is part of a restructuring package that would save Detroit tens of millions of dollars in health costs each year.

“I’m applauding Detroit,” said Dan Miller, the controller in Harrisburg, Pennsylvania, to the New York Times. “I’m hoping that Obamacare turns out to be a great solution, and I would love for our city to have the opportunity to do that.”

Beginning in October, every state will have an online insurance exchange where people can shop for private health care plans. Under the new health care law, these policies have mandatory benefits, which includes emergency services, hospitalization and prescription drugs.

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(Photo: Bill Pugliano/Getty Images)

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