ObamaCare Bailout? Detroit reportedly eyes health care law to cut costs

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Federal judge blocks Detroit bankruptcy lawsuits

Move seen as a win for the Motor City

Detroit could be looking to ObamaCare for a bailout as city leaders try to cut back on retiree health costs as they enter bankruptcy proceedings.

The New York Times reported Monday that the city is proposing a plan aimed at reducing its $5.7 billion in outstanding retiree health costs.

In short, they want to take those retirees too young to qualify for Medicare and send them into the ObamaCare insurance markets -- which are scheduled to launch next year.

Doing so would ease the burden on the Detroit coffers by taking them off city coverage.

But it would inevitably increase the burden on the federal government, with subsidies from ObamaCare being provided by federal taxpayers.

The plan could serve as a way around the warnings from Obama administration officials and lawmakers that they have little interest in extending bankrupt Detroit a bailout.

Treasury Secretary Jacob Lew suggested on ABC's "This Week" on Sunday that the federal government would largely stay out of the bankruptcy proceedings.

"I think when it comes to the questions between Detroit and its creditors, that's really something that Detroit is going to have to work out with its creditors," Lew said.

According to The Times, though, other cash-strapped cities like Chicago are also contemplating shifting retirees onto the insurance exchanges.

That assumes, however, that the exchanges and the rest of the law launch as scheduled at the beginning of 2014. After the administration delayed for one year a requirement on mid-sized and large businesses to provide employee coverage, Republicans are pushing to delay the requirement on individuals to buy insurance. It's an uphill battle for Republicans, but any widespread delay in the mandates could imperil -- or delay -- the overall system.