Comments on: Health Reform Tweaks Seniors' Medicare
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- AMEN BELOW!!!
Shut Up, He Argues
By Rich Lowry
Henry Waxman is peeved. He expects corporate America to swallow health-care reform without a peep of protest -- and, apparently, without revealing new costs to shareholders or the Securities and Exchange Commission.
Last week, AT&T announced it will take an immediate $1 billion write-down thanks to a new tax in the health bill that will cause Caterpillar ($100 million) and Deere & Co. ($150 million), among other large employers, to do the same. The benefits consultancy Towers Watson estimates that the change may reduce corporate profits by as much as $14 billion over time.
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Rich Lowry RealClearPolitics
Health care
That's real money. For comparison: It's enough to bribe Sen. Ben Nelson of the Cornhusker Kickback 140 times over; it's three times the amount Democrats poured into a (failing) weatherization program that once was a highlight of the stimulus bill; it represents 10 percent of the supposed deficit reduction of health-care reform over 10 years.
It may be that the health bill's most immediate, high-profile effect is the destruction of shareholder wealth.
Not to fear. Waxman, the liberal lion who chairs the House Energy and Commerce Committee, is on the case. No, he doesn't want to change the tax provision -- he wants to browbeat the affected corporations. He has called the CEOs of AT&T, Caterpillar and Deere to testify before his committee, accompanying his summons with a far-reaching document request lest the corporations miss the point: This is naked political harassment.
Citing the Congressional Budget Office, Waxman says his concern is that the write-downs appear "to conflict with independent analyses." If he's genuinely surprised at the real world departing from CBO projections, he should brace himself for more shocks. Is he going to demand that OMB Director Peter Orszag testify when the projected deficit reduction doesn't materialize?
Waxman maintains his interest is ensuring the bill "does not have unintended consequences." Because an immensely complex bill of more than 2,000 pages would never have any of those, right?
But Waxman's vendetta and the offending write-downs are hardly unintended or unforeseen.
Democrats clearly plan to blame the private sector for all the downsides of their health plan. In a private lobbying session, President Obama told liberal lawmakers that the bill is only "a beginning." Any increase in costs and premiums -- both of which are inevitable -- will be attributed to corporate malfeasance requiring yet more government intervention.
Democrats can't say they weren't warned about the coming write-downs. Companies began to receive a tax-free, deductible subsidy in 2003 to continue prescription-drug coverage for their retirees, a ploy to keep the firms from dumping retirees into the new government prescription-drug program. Outside experts and big employers counseled against ending the deductibility, pointing out that it would adversely affect the companies' financial statements immediately. (Account- ing rules require corporations to note the long-term effect of the new liability right away.)
These warnings got shelved under a category ensuring their brusque dismissal: Information Inconvenient to the Passage of Health-Care Reform. Now that the prediction has come to pass, it's all AT&T's fault.
The companies will reconsider providing prescription-drug coverage for their retirees at all. The Employee Benefit Research Institute calculates that companies could now save $1,000 per beneficiary by handing them off to the government. As many as 2 million more retirees could end up on the government program, according to James Klein of the American Benefits Council. These retirees might wonder about the truthfulness of Obama's constant promise that everyone can keep his current insurance.
The CBO estimated that the new treatment of the subsidy would generate roughly $5 billion in revenue. If companies stop taking the subsidy, that revenue disappears -- while the costs of the drug program increase.
A Towers Watson study stipulates that "employer plans generally provide much better protection than the standard Medicare benefit." And subsidizing those employer plans is cheaper to the government than providing the coverage itself.
In short, a lose-lose-lose proposition -- no doubt, the first of many. Henry Waxman will be a busy man. - Reply to this comment
- wfw3536: The $500 billion in cuts to medicare is cuts to advantage programs, which benefit insurance companies at the expense of seniors. See my post below.
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- wfw3536: The $500 million in cuts to medicare is cuts to advantage programs, which benefit insurance companies at the expense of seniors. See my post below.
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- To wfw3536: The reason medicare is going broke is because during the Bush administration a program was started called Advantage programs. These programs were not paid for like most of the other programs started during the Bush years. In advantage programs senior health care is turned back over to insurance companies. The insurance companies are given subsidies by the government (taxpayers) of approximately $800 per month per senior in the program. This is far more costly than traditional medicare and puts senior care back in the hands of insurance companies. What reform does is lower those subsidies to insurance companies for advantage programs and takes the money back to strengthen traditional medicare, which is more cost effective and has lower overhead. The insurance companies were taking the money for advantage programs and using it for profits and the bottom line. So you could say the government was subsidizing insurance companies at seniors expense. Reform changes all that. It puts the money back where is belongs and closes another area of waste. That was the reason medicare was in trouble, not because medicare is poorly managed, but because the money was being siphoned out of it into the insurance company pockets.
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- This law was suppose to reduce costs. Now I understand it is raising costs. By the time the doughnut hole is closed I will be dead. Thanks congress. If I make more than 85 K a year I have have to pay higher premiums for insurance. Where is the fix? I do not like this socialist european health law.
Remember in November and vote these socialist out of congress and the White House. - Reply to this comment
- This law was suppose to reduce costs. Now I understand it is raising costs. By the time the doughnut hole is closed I will be dead. Thanks congress. If I make more than 85 K a year I have have to pay higher premiums for insurance. Where is the fix? I do not like this socialist european health law.
Remember in November and vote these socialist out of congress and the White House. - Reply to this comment
- Why isn't this article talking about the 500 billion dollars taken our of medicare when it is going broke in 10 to 12 years. Why didn't they use this 500 billion to help with medicare which will need more than this. Well the answer is the democrats needed to take money out of medicare to sell this health care bill. What will happen is it will cut procedures and benefits that seniors can have. What a terrible way to treat our senior citizens. And the money the government is going to save, well that is a joke as the government is terrible at saving money, just look at the 12 trillion in debt we have and the additional 8 trillion we will have in the next several years.
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- Supplemental coverage or medigap is handled by the insurance companies, but medicare is still the primary, so medicare still pays for most of the health care with the insurance picking up the rest. Much safer than being totally under the control of an insurance company.
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- Medicare Advantage is more expensive than tradtional Medicare. And it will ultimately bankrupt Medicare. Medicare Advantage serves as a cash cow for Republicans, since the government pays private insurance companies, and these private insurance companies in turn give generous campaign contributions to Republicans. If senior citizens want Medicare Advantage let them pay the extra expense out of their own pockets, not on the government's dime. If they want to give away their Medicare money to finance the GOP, fine. Just don't expect the government to pay for it.
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- Did anyone think your premiums were not going up regardless? Ours has risen every year.
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