Dirty Harry would say to Waxman: “You can’t handle the truth”.
Remember when Rep. Waxman ordered a group of CEOs to testify before his subcommittee for writing down earnings to reflect one of the impacts of ObamaCare?
Then, the session was abruptly canceled.
Wonder why?
Well, according to documents obtained by Waxman — and reported on by Fortune: “The Committee’s majority staff issued a memo stating that the write downs were “proper and in accordance with SEC rules.” In other words, the companies were simply following the law.
And, to add fuel to the fire, the company documents indicated that the requirement to allow dependents to remain on their parents’ policies until age 26 will prove costly — very costly. Caterpillar puts the added expense — which is likely to be passed on to the employees — at $20 million a year.
Further, the documents revealed that the companies all were evaluating the possibility of dumping their health care plans, paying the employer mandate penalties, and letting the government handle their employees health care. Why ? To lower their costs — significantly !
For example, Caterpillar estimated in November, when the most likely legislation would have imposed an 8% payroll tax on companies that do not provide coverage, that it could shave $25 million a year, or almost 10% from its bill. Now, because the penalty is $2,000, not 8%, it could reduce its bill by over 70%, by Fortune’s estimate.
Similarly, AT&T revealed that it spends $2.4 billion a year on coverage for its almost 300,000 active employees, a number that would fall to $600 million if AT&T stopped providing health care coverage and paid the penalty option instead.
That raise two issues.
First, Obama says everybody can keep their health care plan if they like it. Not if employers stop offering the programs.
Second, Fortune estimates that if 50% of people covered by company plans get dumped, ObamaCare costs will rise by $160 billion a year in 2016, over and above the ‘gold standard’ CBO projections that propelled passage of the bill.
Oops. Maybe premiums and the deficit won’t come down after all.
That would be a shocker …
Full article:
http://money.cnn.com/2010/05/05/news/companies/dropping_benefits.fortune/
The Homa Files 