The ObamaCare fallout continues
You remember when AT&T and other companies immediately took write downs against profit soon after the ObamaCare legislation was signed into law?
Henry Waxman and Bart Stupak reacted immediately calling for a Congressional hearing so the CEOs of some of these companies could be called on the carpet for trying to show up this fabulous law. Waxman whined that wasn’t its intent. And then, mysteriously, a week or so later, they quietly canceled the hearings.
In a memorandum summarizing its investigation, the Democratic staff of the committee said, “The companies acted properly and in accordance with accounting standards in submitting filings to the S.E.C. in March and April.”
Moreover, it said, “these one-time charges were required by applicable accounting rules.” The committee staff said this view was confirmed by independent experts at the Financial Accounting Standards Board and the American Academy of Actuaries.
Oops. Waxman and Stupak tried to recover a little by saying:
“Companies like AT&T, Verizon and a range of stakeholder associations are hopeful that the benefits of the new law will outweigh the costs,” Mr. Waxman and Mr. Stupak said in a memorandum to committee members. “But they cannot quantify the benefits until the law is implemented.”
Well, apparently they’ve found some more of those “benefits” in the law:
AT&T, which took a $995 million charge to reflect the impact of the health care overhaul, said it would be “evaluating prospective changes to the active and retiree health care benefits offered by the company.”
Under another provision, employers may be subject to financial penalties if they do not offer health insurance to employees. Documents provided to Congress by AT&T indicate that its medical costs in 2009 were $4.7 billion, divided about equally between active employees and retirees — far more than it would pay in penalties if it did not provide coverage.
Verizon said it was taking a $970 million charge against earnings because of the change in tax treatment of a subsidy it receives for retiree drug coverage. In addition, Verizon said it could be affected by a new tax on high-cost health plans that takes effect in 2018.
“Many of the plans that Verizon offers to employees and retirees are projected to have costs above the thresholds in the legislation and will be subject to the 40 percent excise tax,” the company told employees.
So obviously, in the case of AT&T (and many other companies) they’re going to be called into Congressional hearings for breaking Obama’s “if you like your doctor and you like your plan, you can keep it” promise, right? I mean, those are the “benefits” the employees of AT&T and Verizon seem likely to “enjoy” when the law is implemented.
In a general analysis of the new law, Verizon said, “To avoid additional costs and regulations, employers may consider exiting the employer health market and send employees” to state-run insurance exchanges, where people can buy insurance.
A Caterpillar executive made a similar point in an e-mail message to colleagues, saying the tax changes could “drive many employers to just drop coverage for retirees altogether, and let the government foot the whole bill.”
I’d like to write this off to the law of unintended consequences, but that would be pure nonsense. Not only was this known as a probable outcome, but Democrats lied through their teeth when they denied it. It was and is completely intended. It is the companies, however, that will be demonized for doing precisely what Democrats hoped they’d do (or, one assumes, the penalty for not supplying health care would have been much higher and any tax on Cadillac plans much lower). Single payer, here we come.
And you wonder why they kept it hidden so no one could read it until after it passed?
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