Posted on 03/26/2010 6:10:34 PM PDT by SeekAndFind
Congress passed the bill without knowing what was in it. Barack Obama signed it without reading it. Now it looks as though the Associated Press reported on ObamaCare without comprehending its content. Readers will have to scroll far down to discover that the elimination of a key tax break that kept retirees on company prescription-medication plans will mean dumping millions of seniors onto Medicare — and that the AP ignored it until now:
The health care overhaul will cost U.S. companies billions and make them more likely to drop prescription drug coverage for retirees because of a change in how the government subsidizes those benefits.
In the first two days after the law was signed, three major companies — Deere & Co., Caterpillar Inc. and Valero Energy — said they expect to take a total hit of $265 million to account for smaller tax deductions in the future.
With more than 3,500 companies now getting the tax break as an incentive to keep providing coverage, others are almost certain to announce similar cost increases in the weeks ahead as they sort out the impact of the change.
Figuring out what it will mean for retirees will take longer, but analysts said as many as 2 million could lose the prescription drug coverage provided by their former employers, leaving them to enroll in Medicare’s program.
Over the past year, I’ve repeatedly warned about the dangers of static tax analysis. That process considers changes in tax policy without considering its impact on behavior. The closure of this “loophole,” as Robert Gibbs called it yesterday, is a perfect example of this stunted thinking.
The Democrats in Congress argued that they would gain $5.4 billion in revenue by eliminating the tax break enacted in the 2003 Medicare Part D program as an incentive for businesses to keep their retirees out of the Medicare system. Instead, they have given businesses a reason to dump their retirees out of the private networks and into the Part D system now. Not only will the expected tax revenues never appear, but now we will have to spend a lot more money covering those prescriptions out of public funds. The seniors in these programs will suffer most of all, as the Part D coverage is vastly inferior to the private plans offered by businesses in the private sector.
Who could have foreseen this? Well, businesses have been trying to get attention to this problem for months, as the AP somewhat belatedly reports:
Industry groups say they lobbied hard against the change in the tax rules before it was added to the health care law over the winter.
“It was in all of our letters and communications that went up to the Hill, and the companies were heavily involved in that,” said Dena Battle, a tax specialist with the National Association of Manufacturers.
Nationwide, companies would take a $14 billion hit on their financial statements if all of the roughly 3,500 companies receiving the subsidies continued to do so, according to a study by Towers Watson, a human resources consulting firm.
For months, businesses have warned about the problem, and for months, Democrats have claimed this clause as a $5.4 billion revenue source. One might think that the media would be interested in puncturing some bad assumptions. Apparently not.
Two quick points:
1. RAT attempts to blame the GOP will fail. All but the most ignorant person now understands that the RATS own BOcare.
2. Hopefully much of the MSM will be the first to get dumped into Medicare by their failing employers in a cost-saving move... Couldn’t happen to a more deserving bunch.
The American people despise this bill and that anger will continue to build, culminating on Election Day.
It is NOT sufficient that the GOP run on this issue only in congressional elections. It is obvious that the RATS all need hearing aids, so the referendum on BOcare must extend to state and local elections as well. Vote the ENTIRE GOP ticket - all the way down to dogcatcher. If local RATS want to know why, tell them... I am telling my county councilmen etc exactly that. We must destroy their farm team and make the REPEAL effort so obvious and overwhelming that even the MSM cannot spin it to their liking.
I personally would like to see the Democratic Party destroyed for a generation because of this monstrosity. They certainly deserve it.
This bill is going to drive up unemployment. Maybe that's the plan. There is no common sense applied.
These manufacturers need to start closing their US plants and pointing the blame to the Dims. Perhaps the unemployed union thugs might see what its like to experience o-bummacare.
Demoncrats do NOT have common sense.
Almost like she was treating it like it was a Christmas present or pinata.
Pelosi's a psycho.
“These were not unintended consequences but intentional harm to Americans.”
I agree - “oops, more people on Government healthcare” - is NOT an unintended consequence... the whole plan is to get more on govt healthcare.
Folks, this is not a ‘tax increase,’ it is a cut in subsidies.
Please, read the articles.
From a 3/26 WSJ article:
“. . .the legislation would subject it to federal income taxes ON THE SUBSIDIES IT RECEIVES for providing prescription drug benefits for its retirees and their spouses.
Since the Medicare Part D program was enacted in 2003, the Peoria, Ill., company and more than 3,500 others that already provided drug-benefit expenses to retirees have received TAX-FREE SUBSIDIES as an incentive to maintain their drug programs.
The SUBSIDIES average $665 per person covered by a company-sponsored prescription program, according to benefits consultant Towers Watson.”
http://online.wsj.com/article/SB20001424052748703312504575142313494421460.html
More likely retirees will clamor for the heads and hides of the stupid Democrats who inflicted this bureaucratic disorder on them.
This is a knife in the heart of the UAW.
That shows you just how much the Democrats care what UAW ever did for anyone ~ ZILCH!
and your point is????????????????????????????
This is NOT part of obamacare! rather DOD.
The American Legion executive director was on C-Span talking about TRICARE.
He talked more about VA care than TFL. And still did NOT address the NEW FEES in the DOD bill that go into effect in 2011! $525 up front, and $2,888 are NOT MODEST cost sharing! Especially when there are NO COLA’s for 3 more years for retired Military and SS.
http://economicspolitics.blogspot.com/2009/05/tricare-for-life-is-obama-trying-to.html
He has the page number wrong.
http://www.cbo.gov/ftpdocs/99xx/doc9925/12-18-HealthOptions.pdf
Option 96 pg 178
Introduce Minimum Out-of-Pocket Requirements Under TRICARE For Life
TRICARE For Life (TFL) was introduced in 2002 as a supplement to Medicare for military retirees and their family members who are eligible for Medicare. The program pays nearly all medical costs not covered by Medicare and requires few out-of-pocket fees. Because the Department of Defense (DoD) is a passive payer in the program—it neither manages care nor provides incentives for the cost-conscious use of services—it has virtually no means of controlling the program’s costs. In 2008, DoD spent about $8 billion on TFL-eligible beneficiaries in addition to amounts spent for those individuals by Medicare.
This option would help reduce the costs of TFL, as well as costs for Medicare, by introducing minimum out-ofpocket requirements for beneficiaries. Under this option, TFL would not cover any of the first $525 of an enrollee’s cost-sharing liabilities for calendar year 2011 and would limit coverage to 50 percent of the next $4,725 in Medicare cost sharing that the beneficiary incurred. (Because all further cost sharing would be covered by TFL, enrollees could not pay more than $2,888 in cost sharing in that year. Those dollar limits would be indexed to growth in average Medicare costs for later years.) The true outof-pocket provisions in Medicare’s prescription drug program, or Part D, are an example of how this option could work in practice. Under that program, any amounts paid by Medicare or by any other insurer are not included when calculating whether a beneficiary has reached the level of eligibility for catastrophic coverage.
Currently, military treatment facilities (MTFs) do not charge eligible individuals copayments for medical services or pharmaceuticals. In order to reduce beneficiaries’ incentive to switch to MTFs and avoid the minimum out-of-pocket requirements that are central to this option, DoD would need to establish procedures for collecting payments from TFL beneficiaries seeking care from MTFs.
If the savings that would accrue from reduced spending for Medicare were included, the introduction of cost sharing under this option would reduce the federal spending devoted to TFL beneficiaries by about $14 billion through 2014 and by about $40 billion through 2019. Approximately 22 percent of those savings would come from a reduced demand for medical services rather than from a transfer of spending from the government to military retirees and their families.
An advantage of this option is that greater cost sharing would increase TFL beneficiaries’ awareness of the cost of health care and promote a corresponding restraint in their use of medical services. Research has generally shown that introducing modest cost sharing can substantially reduce medical expenditures without causing measurable increases in adverse health outcomes.
Among its disadvantages, this option could discourage some patients (particularly low-income patients) from seeking preventive medical care or from managing their chronic conditions under close medical supervision, which might negatively affect their health.
aarp in bed with obama!
We better revolt I’m warning you folks. We have been taken over by Marxist and he hasn’t even started yet THREE MORE YEARS TO GO!!!!!!!
The list, ping
What little regard Obama had for his grandmother certainly is revealed. He was amazed a black man could upset her.He himself made fun of granny in Hawaii, threw her under the bus, and; we have yet to hear if he even went to her funeral?
I have had my disappointments in life like many, but; mine were never my family. Mine were never the soldiers who laid down their life for me and you. They are the hate the military, far left left goons on Obama’s side.
I wonder how difficult it would be to get the 3500 or so companies affected by the Obomonation to make a sizeable contribution — HELLZBELLZ! GET THEM TO FINANCE THE WHOLE SHEBANG — and help us terminate the Democrat Party in November?
USSC recently paved the way for corporate $$$$ to be spent in the political arena.
If I were a TEA Party or a Republican Party operative, I’d fer shure, fer shure be working on a legal way to use corporate funds to terminate the Democrats in November!
huh?
My point is, we are bashing a reduction in Corporate welfare. Why would we do that, if we are fiscal conservatives? In this case, it is not a bad thing. I hate socialized medicine, but - this particular change is not a tax increase, it is a SUBSIDY reduction!!!!!
We need to be careful what we criticize. Big businesses lobby too, for farm subsidies, auto and bank bailouts. Let’s not automatically be “spun” by them.
Let’s keep everyone honest - and their hands out of the public till.
4L
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