Saturday, March 27, 2010
Healthcare Reform - Passing on the Costs
The front page of the WSJ today highlights AT&T taking a $1 billion charge due to the new healthcare bill. Also taking a painful hit from the healthcare bill are John Deere at $150 million, Caterpillar at $100 million, 3M at $90 million, and AK Steel at $31 million. AT&T's charges in particular revolve around prescription drug related benefits in employee retirement plans. Since AT&T has a large number of current and future retirees as well as a high unionization level, their losses attributed to the healthcare bill are much larger than other companies. Deere for instance is well-known for their extensive employee health insurance plans, this the new bill adds only incrementally to what already exists for the Company. In the past employers who offer prescription coverage to their retirees would receive a federal subsidy to help cover offering this service and were able to deduct the subsidy from their taxes. Essentially, companies were able to deduct part of the cost of providing drugs to their retirees from their taxes. The new healthcare bill eliminates this tax deduction. The charges mentioned here and other places is a result of a tax increase on businesses for providing a much needed service to their retirees.
On a different note, many Republicans lashed out at the passage of the bill. Some of whom were large supporters of Mitt Romney. Need they be reminded Mitt's healthcare plan was strikingly similar to the one passed just last week? - yes. How quickly we can forget what people said a short while ago...
On a different note, many Republicans lashed out at the passage of the bill. Some of whom were large supporters of Mitt Romney. Need they be reminded Mitt's healthcare plan was strikingly similar to the one passed just last week? - yes. How quickly we can forget what people said a short while ago...
# posted by jn @ 3:11 PM 
