In the most telling poll of all – a vote – the citizens of Missouri overwhelmingly voted not to participate in ObamaCare. 71% voted for Proposition C which prohibits Missouri from compelling people to pay a penalty or fine if they fail to carry health coverage.
Of course that obviously doesn’t mean that percentage isn’t going to or doesn’t carry health coverage. Instead it is a grassroots rejection of the premise that the federal government has either the power or authority to make them. And they’ve just prohibited their state from enforcing such a law.
The Missouri vote is likely to have little immediate practical effect because the mandate doesn’t take effect until 2014. If federal courts uphold the federal law as constitutional, it would take precedence over any state law that contradicts it.
And, of course, I loved this:
Opponents included the Missouri Hospital Association, which said that if the mandate isn’t enforced some who can afford insurance will get a free ride and pass the costs on to those who are insured.
Really? You mean like what is done now under Medicare and Medicaid?
But I think this Missouri state senator may have the best point:
“This really wasn’t an effort to poke the president in the eye,” said State Senator Jim Lembke, a Republican. “First and foremost, this was about defining the role of state government and the role of federal government. Whether it’s here in Missouri with health care or in Arizona with illegal immigration, the states are going to get together on this now.”
States have been getting the short end of the mandate stick for decades. Yet many of them work under two constraints the federal government doesn’t. One, most of them are required by law to have a balanced budget. Unfunded mandates of the sort imposed by ObamaCare take a wrecking ball to that sort of requirement. Secondly, the states can’t print money at their whim. Therefore they must borrow any money to fulfill the mandates.
This and the Arizona law may be the first shots in a long war that sees the states again asserting their rights. It will mostly be fought out in the courts and its outcome is going to be critical to the America we are a part of in the future.
If the courts side with the Obama administration, then there’s just about nothing the federal government can’t do or which it can’t involve itself. And as we’ve seen in the last 18 months, it doesn’t take long, if the circumstances are right, for it to intrude to levels never before seen.
But regardless of the outcome in court, the Missouri vote is important. The “Show Me” state is a rather purple state, so I think most expected the vote to be somewhat close with those rejecting ObamaCare winning out. Instead, we see a huge margin rejecting the premise.
It should send a signal to both parties, and it should certainly have Democrats quaking in their boots about November.
Whether or not the parties will heed the message remains to be seen, but the voters of Missouri have pretty much voiced what I think the majority of this country feels – “thanks, but no thanks”. Back off, downsize and cut spending. And stay out of our lives and our health care.
Rep. Kevin Brady (R-TX) had his staff do a study of the ObamaCare bill after its passage to assess exactly what Democrats had blindly passed into law. He also asked his staff to put a chart together to represent the health care system under that law.
The result is mind-boggling and troubling. And if you figured the Secretary of Health and Human Services was the new defacto health care czar, backed by the IRS, you’re correct.
Below is a thumbnail of the chart to give you a flavor of its complexity. Brady admits only represents a third of what is in the bill after which it got too crowded. Said Brady, "it’s actually worse than this."
You can see a full size representation of the chart here. As you peruse it read the legend carefully. You’ll notice 3 areas color coded – “new government”, “expanded government” and “private”. It also charts “new relationships”, such as regulations, requirements and mandates, reporting requirements, oversight and money flow.
Evident to anyone with the IQ of a mushroom is the incredible complexity of what our masters in Congress cobbled together in haste and passed before anyone could actually read the thing through and study the probable consequences. The chart includes:
$569 billion in higher taxes;
$529 billion in cuts to Medicare;
Swelling of the ranks of Medicaid by 16 million;
17 major insurance mandates; and
The creation of two new bureaucracies with powers to impose future rationing: the Patient-Centered Outcomes Research Institute and the Independent Payments Advisory Board.
As might be expected, ObamaCare fulfills almost all the promises of the critics – top driven, bureaucratic, complex, expensive and set up to ration health care.
The chart gives visual evidence of the type monstrosity that has been foisted upon the American public by Democrats. Says Kevin Hassett:
This clearly is a candidate for most disorganized organizational chart ever. It shows that the health system is complex, yes, but also ornate. The new law creates 68 grant programs, 47 bureaucratic entities, 29 demonstration or pilot programs, six regulatory systems, six compliance standards and two entitlements.
Yes friends, the DMV teaming up with the Post Office, have now “organized” your health care and promise it will be “better and less expensive”.
And don’t forget – your new health care czar has the power to make judgments about health care that, by law, cannot be challenged either through an administrative process or the courts. So you are stuck with whatever the Sec HHS decides. That means:
A sprawling, complex bureaucracy has been set up that will have almost absolute power to dictate terms for participating in the health-care system. That’s what the law does to government. What it does to you is worse.
Based on the administration’s own numbers, as many as 117 million people might have to change their health plans by 2013 as their employer-provided coverage loses its grandfathered status and becomes subject to the new Obamacare mandates.
Those mandates also might make your health care more expensive. The Congressional Budget Office predicts that premiums for a small number of families who buy their insurance privately will rise by as much as $2,100.
Finally, and as noted above, there is to be a huge expansion in Medicaid “paid for” by cutting care to the elderly:
To pay for this expansion, the bill takes $529 billion from Medicare, with roughly 39 percent of the cut coming from the Medicare Advantage program. This represents a large transfer of resources, sacrificing the care of the elderly in order to increase the Medicaid rolls.
Another revenue source are the “Cadillac plans” – for those who have them and pay for them, the gig’s up:
Front and center among the new taxes is the 40 percent excise tax on those lucky people with so-called Cadillac health plans. The higher insurance costs that are driven by the government mandates will push many more ordinary plans into Cadillac territory.
As we’ve discussed, the bill relies on a constant revenue stream from these insurance plans from now on, assuming everyone will pay the 40% increased cost to keep their plans. That’s not likely at all, and cutting these plans will effect millions – many of whom bought in lock, stock and barrel, to the promise “if you like your doctor and you like your plan, you can keep both”.
Look at this chart and tell me how you do that.
Yesterday a federal judge in VA ruled that the state of Virginia had “standing” to sue the federal government over the law. That, of course, means nothing more than the lawsuit moves forward, but it is an important first step in repealing this monstrosity or at least the more intrusive and odious parts of it. Obviously it doesn’t ensure success in that endeavor and the White House typically believes it is on the side of angels and the Constitution when it comes to running our lives.
We’ll see. But clearly Nancy Pelosi was right when she said “we have to pass the bill to see what’s in the bill”. Now that we have this chart, we know what’s in the bill – the largest power grab by the federal government since the income tax.
“Change” you can believe in, huh?
Randall Hoven, over at American Thinker, provides us with one of the most succinct and powerful posts I’ve seen is quite a while.
Remember this quote?
“If we do nothing to slow these skyrocketing costs, we will eventually be spending more on Medicare and Medicaid than every other government program combined. Put simply, our health care problem is our deficit problem.” President Obama, September 2009.
That was the “promise” that Obama made – pass health care reform and pass deficit reduction. Except, as usual with this man, it appears the opposite is actually true. And that is to be found in a CBO graph.
So the projection shown in the graph is that if we were to spend on those programs at the March 2010 baseline (as the law reads now) from now till 2020 we’d spend about 400 billion, but with the new and improved ObamaCare, that goes to over 600 billion? Yup, real “deficit reduction” in that package, huh?
We’re also seeing the stirrings of a move from the left to dramatically and drastically cut military spending. Already the war in Afghanistan has gone from the “good and necessary war” per Democrats to one they don’t want to fund anymore. Apparently the military is the area of choice within which the Democrats want to “cut spending”. Again, Hoven, looking at CBO numbers, provides some context to the debate:
Hoven’s Index for July 26, 2010
Medicare and Medicaid spending as percent of GDP:
Defense spending as percent of GDP:
The bottom line is, of course, that ObamaCare is the biggest “deficit reduction” hoax foisted upon the citzenry of the US since the debate about income tax which claimed it would never rise above 2%. And, in fact, it is the rise of entitlement spending – not military spending – where our problem lies.
And for those of you who bought into the monstrosity of ObamaCare under the “deficit reduction” premise – shame on you. Why is it you demonstrate common sense when email scammers from Nigeria try to get your bank account number, but you fall right into the largest legislative scam in recent history based on vague and nonsensical promises that most 5th graders could see through?
Of course you’re most likely among the same people who bought into the hype surrounding this empty suit we now have as a president, so I shouldn’t be that suprised I suppose.
Having made it up as they go, the Obama administration is now arguing that the mandate to buy insurance coverage under Obamacare is a perfectly legal tax.
That, of course, after the President denied it was a tax in order to sell it:
“For us to say that you’ve got to take a responsibility to get health insurance is absolutely not a tax increase,” the president said last September, in a spirited exchange with George Stephanopoulos on the ABC News program “This Week.”
When Mr. Stephanopoulos said the penalty appeared to fit the dictionary definition of a tax, Mr. Obama replied, “I absolutely reject that notion.”
You can tell he was a constitutional expert when he taught, can’t you?
So much so that the Department of Justice, in a brief defending the law, claims it to be a "valid exercise of the Congressional power to impose taxes:
Congress can use its taxing power “even for purposes that would exceed its powers under other provisions” of the Constitution, the department said. For more than a century, it added, the Supreme Court has held that Congress can tax activities that it could not reach by using its power to regulate commerce.
Except Congress doesn’t argue that at all. Instead it relies on the Commerce Clause as its justification for the mandate:
Congress anticipated a constitutional challenge to the individual mandate. Accordingly, the law includes 10 detailed findings meant to show that the mandate regulates commercial activity important to the nation’s economy. Nowhere does Congress cite its taxing power as a source of authority.
And then, per the White House, if any additional authority is needed – other than the power to define and then levy taxes (Congress) or the commerce clause, why just consult the General Welfare Clause. They have more Constitutional ways to make you buy something you may not want than you can imagine:
“The Commerce Clause supplies sufficient authority for the shared-responsibility requirements in the new health reform law,” Mr. Pfeiffer said. “To the extent that there is any question of additional authority — and we don’t believe there is — it would be available through the General Welfare Clause.”
One has to assume they just plan on overwhelming the Court with as many “viable alternatives” as it takes to get their way.
One Yale professor says the tax argument – the one Mr. Obama denied – is the strongest argument:
Jack M. Balkin, a professor at Yale Law School who supports the new law, said, “The tax argument is the strongest argument for upholding” the individual-coverage requirement.
Mr. Obama “has not been honest with the American people about the nature of this bill,” Mr. Balkin said last month at a meeting of the American Constitution Society, a progressive legal organization. “This bill is a tax. Because it’s a tax, it’s completely constitutional.”
Smoke, mirrors, deceit and debt. That’s what you get for trusting a snake-oil salesman with your health care. Oh and this:
“This is the first time that Congress has ever ordered Americans to use their own money to purchase a particular good or service,” said Senator Orrin G. Hatch, Republican of Utah.
If this survives the court challenge, it won’t be the last – trust me on that.
The irony, of course, is the Constitution was written to limit government and keep it off our back. Instead it is now being used to expand government and intrude more and more deeply in our lives.
Because internal White House documents estimate that 51% of employers are likely to have to give up their current health care coverage due to ObamaCare. And that’s the conservative estimate. Worst case, the percentage goes to 69% of all employers and 80% of smaller firms.
Why? Well, ObamaCare states that existing insurance plans will be “granfathered in” (i.e. you can “keep your plan”) if they meet certain criteria. Main among them is employers may not make any changes to their existing insurance plan after March 23rd of this year until the ObamaCare implementation of this provision on Jan. 1st, 2014. Those changes an employer might make that would bar it from being grandfathered in include:
• It eliminates benefits related to diagnosis or treatment of a particular condition.
• It increases the percentage of a cost-sharing requirement (such as co-insurance) above its level as of March 23, 2010.
• It increases the fixed amount of cost-sharing such as deductibles or out-of-pocket limits by a total percentage measured from March 23, 2010, that is more than the sum of medical inflation plus 15 percentage points.
• It increases co-payments from March 23, 2010, by an amount that is the greater of: medical inflation plus 15 percentage points or medical inflation plus $5.
• The employer’s share of the premium decreases more than 5 percentage points below what the share was on March 23, 2010.
Most of us who have and have had insurance for any amount of time know that those are fairly routine changes driven by cost increases, benefit changes, and the like. However, any of those puts the plan outside the “grandfathered” status and the ObamaCare law requires the firm to either adopot a new plan or drop coverage and pay a penalty.
How likely is it employers won’t make those sorts of changes in the next 3 years? Not very:
Analyzing data on employer-provided plans from 2008 and 2009, the report stated: “Many employers who made changes between 2008 and 2009 that would have caused them to relinquish grandfather status did so based on exceeding one of the cost-sharing limits.”
In total, 66% of small businesses and 47% of large businesses made a change in their health care plans last year that would have forfeited their grandfathered status.
. Essentially government has taken away the ability of employers to manage their plans and will, by force of law, force any of them that do so within the criteria above to drop that plan for another or drop coverage altogether and pay a penalty.
The document in which this information was found is a draft HHS, Labor and IRS joint study of the impact of the bill. When asked about it, a White House spokesman said:
“This is a draft document, and we will be releasing the final regulation when it is complete. The president made a promise to the American people that if they liked their health care plan, they can keep it. The regulation, when finalized, will uphold that promise.”
That, of course, is the official talking point position, aka spin, or if you prefer, smoke and mirrors. The same official then conceded:
“It is difficult to predict how plans and employers will behave in the coming years, but if plans make changes that negatively impact consumers, then they will lose their grandfather status.”
That is the unspun or “it’s exactly as you said it” version. And of course the government will waste no time blaming the loss of the insurance “you like” on your employer.
Because, as we’ve witnessed for 16 months – that’s what this administration does best – blame-shifting. Simple fact: no law, no loss of the “insurance you like”.
End of story.
Guess what folks, Canada’s moon pony and unicorn “what’s wrong with you Americans, you’re so uncivilized to not have national health care” health care system is in serious financial trouble. And, unbelievably, for the very same reason critics of the recent US health care law said would inevitably happen here. I know, I know – just hard to believe, isn’t it?
The crux of the problem? Well lack of money, what else?
Pressured by an aging population and the need to rein in budget deficits, Canada’s provinces are taking tough measures to curb healthcare costs, a trend that could erode the principles of the popular state-funded system.
“There’s got to be some change to the status quo whether it happens in three years or 10 years,” said Derek Burleton, senior economist at Toronto-Dominion Bank.
“We can’t continually see health spending growing above and beyond the growth rate in the economy because, at some point, it means crowding out of all the other government services.
“At some stage we’re going to hit a breaking point.”
They’re kidding, right? Weren’t we told that once government got involved this stuff would be affordable and would go on forever?
Their first target, of course, is pharmaceutical companies. They want them to slash prices. But at some point, pharma is going to say it can’t anymore. Because pharma isn’t the problem. Central control of health care delivery is. It has no flexibility, or at least not to a level that it can adapt to changes in the market with any nimbleness. That means it continues to hemorrhage money. Health care spending rises at 6% a year by plan. But it is going to, as mentioned above, begin to crowd out all other government services unless the Canadian government gets a handle on it and does so fairly quickly. Anyone know what that means?
But that deal ends in 2013, and the federal government is unlikely to be as generous in future, especially for one-off projects.
“As Ottawa looks to repair its budget balance … one could see these one-time allocations to specific health projects might be curtailed,” said Mary Webb, senior economist at Scotia Capital.
My guess is more than “one-time allocations” might be curtailed. Consider Ontario:
Ontario says healthcare could eat up 70 percent of its budget in 12 years, if all these costs are left unchecked.
“Our objective is to preserve the quality healthcare system we have and indeed to enhance it. But there are difficult decisions ahead and we will continue to make them,” Ontario Finance Minister Dwight Duncan told Reuters.
That’s bureaucratise for “we’re going to have to ration this stuff and do it pretty darn radically” – unless, of course, Ontario would prefer to spend 70% of its budget on health care costs.
I doubt that’s the case.
Here again we have the end game (or at least the results of the game at this point headed to its inevitable end) of where we’re headed.
My favorite line in the story:
Scotia Capital’s Webb said one cost-saving idea may be to make patients aware of how much it costs each time they visit a healthcare professional. “(The public) will use the services more wisely if they know how much it’s costing,” she said.
“If it’s absolutely free with no information on the cost and the information of an alternative that would be have been more practical, then how can we expect the public to wisely use the service?”
No – she really said that. And that’s the type of person who first embraced the moon pony and unicorn promises that were made for the system.
The problem with all of this “reality” suddenly descending on the system? It is pretty apparent to anyone who has studied a welfare state (and the same place we’re now headed):
But change may come slowly. Universal healthcare is central to Canada’s national identity, and decisions are made as much on politics as economics.
“It’s an area that Canadians don’t want to see touched,” said TD’s Burleton. “Essentially it boils down the wishes of the population.
And so it goes, another chapter in the inevitable end of all such programs – over used, broke and headed toward strict rationing. And the moon pony crowd thinks that if they just tell Canadians how much it really costs when they see a doctor, they’ll do it less and save the system.
Heh, yeah, good luck with that.
Or at least they won’t be given much of an incentive to do so if they provide health care:
A study by the National Center for Policy Analysis shows that tax credits in the new healthcare law could negatively impact small-business hiring decisions.
The new law provides a 50 percent tax credit to companies offering health coverage that have fewer than 10 workers who, on average, earn $25,000 a year. The tax credit is reduced as more employees are added to the payroll.
The NCPA study finds the reduction in tax relief to be a cost concern for companies looking to hire additional workers, but operate on slim profit margin yet still provide employee health coverage.
A couple of points – A) the tax credit is temporary (until 2016), and, only covers a small part of the cost of hiring an employee. However, B) it is a available to all small companies with 25 employees or less already offering health insurance. The stated purpose of the tax credit is to encourage those small businesses who fit the template (10 or fewer workers averaging about $25k a year, up to 25) to continue to provide health care and encourage those who aren’t to do so. But it provides the tax credit on a sliding scale, and that scale discourages hiring at the scale breaks:
Using insurance premium cost projections supplied by the nonpartisan Congressional Budget Office (CBO), the study states that the credit reaches its optimal point at 13 workers, with relief peaking at $36,400 for qualifying business.
After the 13th worker the economics surrounding the credit change, the study says.
For employers with 15 workers, taking on an additional hire will reduce the credit by $1,400. For a company looking to expand from 20 to 21 workers, the credit will shrink by $3,733. And businesses will take a $5,600 reduction on the credit when hiring the 25th worker.
The credit phases out for companies with at least 26 employees.
If the company is already at 13, it most likely won’t hire 14, or 15. If it is at 20, it’s most likely not going to hire 21. And 26 is most likely out of the question.
Bill Rys, tax counsel at the National Federation of Independent Businesses, told The Hill that while demand is the primary driver for hiring decisions, costs related to new hires is a key factor.
“To the extent that a tax credit is related to the benefits that you’re paying your employees, it is going to be a factor in determining what is the cost of the employee,” he said. “The fact that you’re losing a portion of the credit because you brought in a new employee is going to have to factor into the cost of who you’re hiring.”
So there is a negative incentive – at least as long as the tax credit exists – to hire people if it will lessen the tax credit. Instead:
“If a business can make a decision to substitute capital for labor – say, contract the procedure out or automate it – I believe [losing the tax credit] will play an important part in the reluctance to hire,” Villarreal said, adding, “It’s puzzling that we have this perverse incentive not to have businesses grow by not encouraging them to hire additional workers.”
UPDATE: Even more good news as companies read through the legislation and discover little hidden nuggets of penalty and cost. For instance:
About one-third of employers subject to major requirements of the new health care law may face tax penalties because they offer health insurance that could be considered unaffordable to some employees, a new study says.
It seems the law deems insurance that is unaffordable by a family to be an insurance cost that is more than 9.5% of their household income. Of course, few if any companies know the “household income” of their employees. That’s because, mostly, it’s none of their business. But also because it may be comprised of a second or third income, dividend, disability or even retirement income.
But, if it is over 9.5% of that household income, companies can be fined up to $3,000 per employee. Of course they won’t know that until and unless the employee files for a federal tax credit because he or she has determined their insurance cost is over 9.5% of their household income (is that gross or AGI?):
If an employer’s health plan is deemed unaffordable, the worker may qualify for a federal tax credit, or subsidy, to buy coverage in a new state-based marketplace known as an insurance exchange. A person claiming a credit must disclose income information to the exchange. The exchange will then notify employers if any of their workers qualify for subsidies.
Along with notifying the employer of this info, I suppose the “exchange” will also notify the appropriate government agency that is responsible for levying the fine.
Wow – no incentive there to just drop coverage for everyone, is there?
What a monstrosity the Democrats have brought upon us.
In this podcast, Bruce, Michael, and Dale discuss DADT, The Euro, and the spiraling cost of ObamaCare…even before we’ve gotten any of it.
The direct link to the podcast can be found here.
The intro and outro music is Vena Cava by 50 Foot Wave, and is available for free download here.
As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here. For podcasts from 2005 to 2009, they can be accessed through the RSS Archive Feed.
The bailout of Greece may not work. Spain is teetering on the edge of serious financial doom. The Euro is taking a beating. And the banks of Europe are not looking too healthy overall. Meanwhile, here in the States, unfunded government debt, already expanding at an unprecedented rate, is set to explode. What do all of these things have in common? They are the direct result of expanding the welfare state without any means of actually paying for all of it.
In truth, there is never a way to pay for expanding the welfare state because, while wealth creation isn’t a zero-sum game, the population of wealth-creators is; after all, not just anyone can create electricity, telephones, heart medications, MicroSoft, Wal-Mart, or even pencils without some know-how, sweat and inspiration. If that were possible, then wealth creation could never be retarded, regardless of the impediments. Some wise, noble, and completely selfless individual would always emerge to drive the economy forward. Alas, self-interest trumps all, without which wealth-creation is for the horses.
No matter how ingenious the plan, or divine the motives, the only way for governments to fund the welfare state is to tax the wealth-creators. As even the most Marxist of intellectuals knows, if you want less of something, then tax it. This is why cigarettes are levied against in ridiculous proportions, and why carbon taxes are considered (by some) to be the savior of our planet. Well, taxing wealth-creation works exactly the same way: tax it more, and you will get less of it. Which leads to the inexorable conclusion that, as the governments of the world sink deeper into fiscal crisis, the looters will be coming en masse.
Does that mean that we are in for another Great Depression? Not necessarily. In fact, I predict that no such thing will occur. For starters, we have many institutions in place today that didn’t exist in the 1930’s such as the FDIC, Social Security, Medicare, the IMF, and the World Bank. Some of these things are arguably beneficial in that they smooth out the rough patches that economies inevitably encounter. The U.S. economy, for example, may not have realized the devastation it did if old people, like McQ, could have survived without taxing their families’ resources so much, or the FDIC had been in place to quell bank runs. Maybe. But more importantly, in this day and age our politics and law-making bodies (and those of every democratic society) are dominated by those whose own self-interest is firmly grounded in the ability to buy votes. That ability is highly dependent upon feeding the welfare state, since the vast majority of votes are bought from those who don’t create electricity or heart medications. This is why politicians of all stripes won’t take steps that would decrease the welfare state, because to do so will cost them votes — to the politician who promises more largesse at the expense of whatever hated rival is being villainized at the time. Accordingly, the odds are rather stacked against wealth-creators continuing to employ their skills in service of the very state that punishes them.
Instead of the Great Depression, Part Deux, I would predict that the elites (those, and their friends, who hold the power to dole out goodies for votes) will shuffle the deck just enough to ensure that they stay in favor, while allowing the overall health of the economy to softly fade into oblivion. They are like Dr. Kevorkian administering to capitalism. The ability to create wealth will slowly continue to be arrogated to the governors and “experts,” while the welfare state expands in decrescendo. Eventually, we will be left with something akin to the Ottoman Empire: all power and glory in name only, inside a rotting shell, harkening back to a time so dissimilar as to be unworthy of the title. What’s left will be hopeless, farcical and cruel, and will not have the slightest ability to nurture the welfare state that started it all. Perhaps the “Long Morose” would be a better title.
Irrespective of my gloomy predictions, there simply isn’t any question that, at some point, the beneficiaries of the great welfare state will have to take a bath. Most likely, that day will come when everyone jumps in the tub together. Until that time, prepare for the politically powerful to loot the wealth-creators out of existence in order to pay off the welfare beneficiaries. Eventually the only ones left to take that bath will be the filthy and the unwashed.
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?