PrintFOR IMMEDIATE RELEASE
Contact: Media Relations 202-268-2155
November 3, 2005
News Release No. 05-093
www.usps.com
POSTAL SERVICE APPLIES AS MEDICARE PART D PROVIDER
WASHINGTON, DC - The U.S. Postal Service has applied to be a Medicare Part D provider, which would enable it to receive the employer's retiree prescription drug subsidy under the Medicare Modernization Act (MMA) of 2003 (P.L. 108-173).
The Postal Service qualifies for this subsidy through its direct payment of the employer's premium to the Federal Employees Health Benefits Program (FEHBP) that is administered by the federal Office of Personnel Management (OPM). Under the terms of the MMA, employers, including the federal government, are eligible to receive the Medicare employer prescription drug subsidy if their benefit plans provide prescription drug coverage at or above specified levels.
OPM has said that it will forego the Medicare employer prescription drug subsidy for 2006 on the basis that there is no good rationale to pay itself to continue providing drug coverage to federal retirees of agencies that are fully supported by federal tax dollars. As distinct from the federal government, the Postal Service directly funds the costs of its retirees' health benefits with revenues generated through postage rates, not taxpayer dollars. In fiscal year 2005, the Postal Service paid $6.6 billion for employee and retiree health benefits and estimates that acting as a Medicare Part D provider could save postal ratepayers $250 million per year.
A number of members of Congress support the Postal Service's reasoning. In an Oct. 20, 2005, letter to Office of Management and Budget Director Joshua Bolten, 59 Members of Congress said "the Postal Service should be afforded the opportunity, in consultation with OPM, to elect to receive the retiree drug subsidy for its nearly 330,000 Medicare-eligible retirees and survivors."
Since 1775, the Postal Service and its predecessor, the Post Office Department, has connected friends, families, neighbors and businesses by mail. It is an independent federal agency that visits 142 million homes and businesses every day, six days a week and is the only service provider delivering to every address in the nation. The Postal Service receives no taxpayer dollars for routine operations, but derives its operating revenues solely from the sale of postage, products and services. With annual revenues of more than $69 billion, it is the world's leading provider of mailing and delivery services, offering some of the most affordable postage rates in the world. The Postal Service delivers more than 46 percent of the world's mail volume-some 206 billion letters, advertisements, periodicals and packages a year-and serves seven and a half million customers each day at its 37,000 retail locations nationwide. Its website, usps.com, attracts more than 21 million visitors each month.