USPS May Declare Bankruptcy Citing High Workers Compensation Costs
Republished with permission from Jon L. Gelman
The Washington Post reported Saturday that the US Postal Service (USPS) may declare bankruptcy and cited high combined benefit costs as a major cause for its financial instability. The quasi-governmental agency is running into problems it claims because of its requirement to to pre-fund $5.4 billion to a retiree health benefit fund and pay $2.5 billion to the federal workers' compensation fund.
The USPS's troubles mirror that difficulties stangulating the nation's network of state workers' systems caused by the inability to fund soaring medical costs enhanced by complications caused by duplicate administrative costs engulfed by a multiplicity of collateral programs. In contested claims injured workers are shifted to other benefit programs to pay for medical costs. Those secondary programs ultimately seek reimbursement from the primary benefit program, workers' compensation coverage, and literally clog up administrative dockets and create greatly enhanced processing costs and monumental delays.
While the USPS will seek assistance from the Republican majority in US Congress, it is uncertain what financial aid will be forthcoming, or whether Congress will take a deeper look at the nation's workers' compensation entirely. The last time the Republican's dominated Congress proposals were suggested by the former Speaker, Newt Gingrich, to over haul the national system entirely.
The medical component is now in critical condition. It remains uncertain if it will addressed in the next congressional term, or whether it will be the can that is kicked down the road to be dealt with in the future. The growing trend remains, that Federalization of the medical delivery component is the probable solution to both the USPS's compensation difficulties as well as the the nation's.
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