Surpise! Major employers, like AT&T, considering dropping healthcare coverage

Who would've guessed? Faced with the choice of huge premium increases, or minimal federal fines and penalties, major employers are contemplating the termination of healthcare coverage.

When Obama "promised" you will keep the same insurance and the same caregivers, he knew he would later be able to say, "See; it wasn't me, it was the big corporations!"

He knew, as did the "deniers" and "fearmongers," that employers and carriers would abandon costly obligations that the government and employees would opt for under Obamacare.

The great mystery surrounding the historic health care bill is how the corporations that provide coverage for most Americans -- coverage they know and prize -- will react to the new law's radically different regime of subsidies, penalties, and taxes. Now, we're getting a remarkable inside look at the options AT&T, Deere, and other big companies are weighing to deal with the new legislation.

Internal documents recently reviewed by Fortune, originally requested by Congress, show what the bill's critics predicted, and what its champions dreaded: many large companies are examining a course that was heretofore unthinkable, dumping the health care coverage they provide to their workers in exchange for paying penalty fees to the government.

Forbes: Documents reveal AT&T, Verizon, others, thought about dropping employer-sponsored benefits

Everything the opponents of Obama's health care "reform" said, and were accused of lying about, or were going to be "called out" on, are turning to be not just accurate, but conservative.

That would dismantle the employer-based system that has reigned since World War II. It would also seem to contradict President Obama's statements that Americans who like their current plans could keep them. And as we'll see, it would hugely magnify the projected costs for the bill, which controls deficits only by assuming that America's employers would remain the backbone of the nation's health care system.

Hence, health-care reform risks becoming a victim of unintended consequences. Amazingly, the corporate documents that prove this point became public because of a different set of unintended consequences: they told a story far different than the one the politicians who demanded them expected.

See, the Congressional advocate bvelieved that large employers were joining in on the "exaggerated" fears of the consequences of the health care legislation they rammed down taxpayers' throats. But when they subpoenaed the corporate records, they found out the bitter truth: The costs to employees, employers and taxpayers are far higher than even the worst estimates of the "naysayers."

In the days after President Obama signed the bill on March 24, a number of companies announced big write downs due to some fiscal changes it ushered in. The legislation eliminated a company's right to deduct the federal retiree drug-benefit subsidy from their corporate taxes. That reduced projected revenue. As a result, AT&T (T, Fortune 500) and Verizon (VZ, Fortune 500) took well-publicized charges of around $1 billion.

The announcements greatly annoyed Representative Henry Waxman, who accused the companies of using the big numbers to exaggerate health care reform's burden on employers. Waxman, chairman of the House Energy and Commerce Committee, demanded that they turn over their confidential memos, and summoned their top executives for hearings.

But Waxman didn't simply request documents related to the write down issue. He wanted every document the companies created that discussed what the bill would do to their most uncontrollable expense: healthcare costs.

The request yielded 1,100 pages of documents from four major employers: AT&T, Verizon, Caterpillar and Deere (DE, Fortune 500). No sooner did the Democrats on the Energy Committee read them than they abruptly cancelled the hearings. On April 14, the Committee's majority staff issued a memo stating that the write downs were "proper and in accordance with SEC rules." The committee also stated that the memos took a generally sunny view of the new legislation. The documents, said the Democrats' memo, show that "the overall impact of health reform on large employers could be beneficial."

Nowhere in the five-page report did the majority staff mention that not one, but all four companies, were weighing the costs and benefits of dropping their coverage.

How sad. Who would've guessed that a businessman would look at costs, benefits, and options in a tight economy?

Look what you've done to my country.

jw

[edit on 6-5-2010 by jdub297]

I am sorry, but I can not keep from laughing. Obviously is a company only has to pay a small fine/penalty versus providing a matching contribution for healthcare that is much higher than the fine. It is pretty sure bet that the company will pay which ever is the lesser amount.

Now if the fine for not providing was something like 25%-50% of the business's gross income was the penalty (and therefore higher than the cost of insurance) then the company would go all out for providing insurance.

I think the next major law to be passed is that every elected and appointed official in the entire world needs to be executed if any one of them is caught committing so much as a morally ambiguous act, not even something as big as a minor misdemeanor like littering.

Sure, that proposal is a pretty stupid one, but you know it isn't half as stupid as this HCR was. And that is the sad reality of the world we live in today.

Only an idiot would believe that a company would not look at the bottom line and realize that it would be cheeper to dump the insurance and pay the fine and not do it. Companies are so into looking at the bottom line that they will fire every last worker (therefore leaving no one with an income to purchase their product) if they think it will increase their profit for the quarter.

reply to post by Ahabstar

Unless, of course, as with FNMA, FHLMC, AIG, GM and Chrysler, the government just takes over ownership and control.

Then, making a profit no longer matters and the books can be cooked any way they "owners" want to make things look nice to potential investors or purchasers.

With government ownership of finance, production, health care and insurance, there no longer is a "bottom line" it is now a deep pocket - ours.

jw

Just saw this on CNN as well.

CNN Article




This is something that they never showed in the healthcare debates. This is exactly what every single company is going to consider. Is it more cost effective to just drop coverage and pay the fine? This absolutely sickens me to no end. At the very least they need to increase fines for companies that do not offer the coverage and make them astronomical so it's not viable for them to do without.

reply to post by Hypntick

Hey, wait a minute.

You can not contend that businesses would act in the best interest of the business.

Our President has promised that nothing would change; our employers and insurers would gladly accept more expense and exposure at their own cost.

If you truly believe that a business would pass along its costs to its customers, then you must be some capitalist fear mongerer.

Everyone knows that business exists only to serve the government and the common good. People will start companies to help support the feds without regard to profit - just ask AIG, FNMA, FHLMC, GM, AIG and Chrysler.

I'm sure this is all under control.

jw

I can't decide which angers me more: being proven right about the health care reform they rushed through, or that people wouldn't listen before it was too late to stop it being passed. Maybe next time people should at least listen to the opposing sides point of view instead of just buying what Obama, Pelosi and the rest tell them. Too much to hope for though, I'm sure.

reply to post by Jenna


Does this mean that "finance reform" and "immigration reform" aren't going to meet with your unquestioning approval?

Surely, if BHO says these are what we need, then we should back them 100%, no?

What is it about right-wing opposition that we fail to see that the federal government should be more in control of our lives than ever?

If the government offers guaranteed income absent work, guaranteed health care, guaranteed home ownership and education, why should we worry about anything?

jw

Originally posted by jdub297
Does this mean that "finance reform" and "immigration reform" aren't going to meet with your unquestioning approval?

Pretty much. I'm a hard-case like that though.

Surely, if BHO says these are what we need, then we should back them 100%, no?

The nice man holding the taser tells me to say yes. Don't tell him, but I disagree.

What is it about right-wing opposition that we fail to see that the federal government should be more in control of our lives than ever?

If the government offers guaranteed income absent work, guaranteed health care, guaranteed home ownership and education, why should we worry about anything?

Personally I just don't like handouts. If I haven't earned it, I don't want it and refuse to take it. If I have earned it, no one has the right to take it from me.

reply to post by Jenna
Maybe there are always "strings attached" or "fine print
' that make the feds "help"
are a little less attractive,

Considrering is the key word here. They won't drop health care coverage. That would outrage their employees, crated a strike/mass exodus from the company. I imagine that we won't hear too much more about this story, as the employees hear of this, there will be an uproar throughout the company....enough to scare the executives...and the stockholders.

Originally posted by Aggie Man
Considrering is the key word here. They won't drop health care coverage. That would outrage their employees, crated a strike/mass exodus from the company. I imagine that we won't hear too much more about this story, as the employees hear of this, there will be an uproar throughout the company....enough to scare the executives...and the stockholders.

Strike? Mass exodus from the companies?

You've got to be dreaming that in this economy employees would do any such thing.

Time for supporters of obama and obamacare to face the reality that huge mistakes have been made - both in November 2008 and earlier this year.

Otherwise, you will in effect be going down with the ship solely for the sake of ideology.

Waxman’s Unintended Consequences Reveal Intended Consequences

Shortly after the boondoggle known as the health care bill was passed, corporations discovered that the bill had a lot of detrimental factors to it, which, as Nancy Pelosi infamously said, we couldn’t find out until the bill was passed. As such, upon its passage, corporations began taking write-downs due to the elimination, by the new law, of many deductions they had previously been allowed to take.

This didn’t sit well with Representative Waxman, being utterly ignorant in the ways of business, and it got his rather unfortunate nose out of joint. He decided to use strong arm tactics, in his position as Chairman of the House Energy and Commerce Committee and demanded various things from corporations, including confidential memos. Egregious enough as that was, he didn’t stop there. Unfortunately for him and his fellow Democrats, there were unintended consequences of his strong arm tactics. They ended up revealing the intended consequences of the Health Care Bill: No more employer-provided health care for you.

Sources: IOTW andredstate

Originally posted by centurion1211
Strike? Mass exodus from the companies?

You've got to be dreaming that in this economy employees would do any such thing.

Time for supporters of obama and obamacare to face the reality that huge mistakes have been made - both in November 2008 and earlier this year.

Otherwise, you will in effect be going down with the ship solely for the sake of ideology.

What does my support for Obama have to do with my stance?

You know that, to many people, their employee benefits are more important to them that their actual pay.

I stand by my previous statement....which was not politically motivated. I suggest you "grow up" and quit making every debate a political.

When I turn out to be right...and you wrong...you can rest assured that I will not be back in this thread to smear your political ideologies.

reply to post by jdub297


Whos surprised? O'Bama is a retard that jacked up the healthcare crisis wayyyyyyyyy worse than anyone with the iq of a turnip could've. In fact someone with an IQ of a turnip could've done BETTER!!!!!

Originally posted by Aggie Man

Originally posted by centurion1211
Strike? Mass exodus from the companies?

You've got to be dreaming that in this economy employees would do any such thing.

Time for supporters of obama and obamacare to face the reality that huge mistakes have been made - both in November 2008 and earlier this year.

Otherwise, you will in effect be going down with the ship solely for the sake of ideology.

What does my support for Obama have to do with my stance?

You know that, to many people, their employee benefits are more important to them that their actual pay.

That's just ridiculous! People can forgo healthcare before they can ever give up food and shelter.

I stand by my previous statement....which was not politically motivated. I suggest you "grow up" and quit making every debate a political.

When I turn out to be right...and you wrong...you can rest assured that I will not be back in this thread to smear your political ideologies.

These issues ARE political, no matter how much you'd like to pretend they're not as the people you've supported pile up the mistakes that are going to end up hurting this country badly.

Also suggest you learn a way to debate an issue without having to make personal insults when shown to be wrong on an issue. That would indicate "growing up" was actually taking place.

That said, go ahead and stand by your statement. I'll stand by mine - based on common sense - that most people will not quit their jobs if their company drops healthcare (hands it over to the government) due to the fact that they would also end up unemployed in today's current job market.

And if companies do drop healthcare benefit and force the government to take them over, that will prove obama's promise that people could keep their existing plans to be just one more lie.

Try this on for size. obama lied and (private) healthcare died.

The thing most of his supporters are still failing to realize is that the obama regime knew full well this would happen after they made their promises and passed their bill.

[edit on 5/7/2010 by centurion1211]

Perhaps this is the first step in transitioning our health care system towards a public one? If tens of millions of people lose their insurance and can not afford to see doctors then there would seem to be no choice.

Originally posted by DJM8507
Perhaps this is the first step in transitioning our health care system towards a public one? If tens of millions of people lose their insurance and can not afford to see doctors then there would seem to be no choice.

As we've been saying ...

We've also been saying that the dems that passed obamacare are likely NOT surprised at this development, and were actually hoping this would happen to help them gain their true goal of ONLY having a public "option" (option ).

Originally posted by Hypntick

This is something that they never showed in the healthcare debates. This is exactly what every single company is going to consider. Is it more cost effective to just drop coverage and pay the fine? This absolutely sickens me to no end. At the very least they need to increase fines for companies that do not offer the coverage and make them astronomical so it's not viable for them to do without.

They didn't HAVE to show this during the health care debates! Most of us yelling that Obamacare was a bad idea KNEW this was going to happen. It was the far-left who was telling you "No, no, companies aren't going to do this" and some people bought that like it was gospel.

The real question is small businesses that currently do not offer health insurance - they now have to pay a fine for not offering coverage on top of their normal operating costs. I predict that either unemployment will rise as a result or many small businesses will fail as they just can't absorb the added penalties and make it work.

I wonder how those same folks supporting Obamacare at the time are going to feel about it after they've lost their insurance or their job because of this?

[edit on 7-5-2010 by sos37]

Originally posted by DJM8507
Perhaps this is the first step in transitioning our health care system towards a public one? If tens of millions of people lose their insurance and can not afford to see doctors then there would seem to be no choice.

Gee....forced to have a public option, completely run by the government, to combat all of the companies no longer offering healthcare to employees because of the huge cost that the government has now placed on them.

Who could have seen that coming?

Of course these large companies will drop coverage. Obama was planning on this all along. Corporations are amoral plain and simple. They do not exist to make their employees happy and comfortable. They exist to make a profit for investors. PROFIT. Period.

I will assure you that the money saved by cutting benefits will be put to the bottom line and not in your pockets as part of your total salary package. Score for the corps. and Obama.

There will no longer be any choices for healthcare coverage and I will lose my excellent coverage.