Detroit looks to health exchange to resolve bankruptcy

As Detroit attempts to restructure after declaring bankruptcy in July, city officials are considering moving some retirees to the state's health insurance exchange.

Detroit Emergency Manager Kevyn Orr may cancel health insurance for city retirees under 65, replacing their current benefits with a $125 stipend they can use to buy coverage on the federally-run online marketplace available in Michigan, reported the Detroit Free Press.

If the city implements Orr's plan, Michigan's insurers would feel the ripple effects. Blue Cross Blue Shield of Michigan, which covers many of Detroit's employees and retirees, would lose a large portion of its business with the city, for example.

The monthly stipend "would be a relatively small percentage of what is currently being paid in healthcare benefits" to the roughly 21,000 retirees who are younger than 65 years old, Brian O'Keefe, a lawyer representing two Detroit retiree associations, told the Free Press.

What's more, the decision-making process regarding city retirees' health coverage could continue for months past the beginning of open enrollment for the exchange, Reuters reported. "This is an initial proposal or an initial shot across the bow," O'Keefe said. "There's a long way to go."

But Orr's spokesman, Bill Nowling, said it's important for Detroit to "get an agreement and move forward on a plan because retirees are going to have to start making decisions about what provider they want to seek out."

Orr's plan would shift city retirees older than 65 to Medicare, reported Michigan Radio.

To learn more:
- read the Detroit Free Press article
- see the Reuters article
- check out the Michigan Radio article