Posted on 04/15/2005 9:50:32 AM PDT by FlyLow
Imagine you're running a company. You've been providing prescription drug coverage to your retired employees for years. But now the government is willing to do so. Do you continue providing benefits, or save yourself money and responsibility by letting Uncle Sam provide those benefits?
This question won't be merely hypothetical for long. Starting next January, the federal government will add a prescription drug benefit to Medicare. All seniors, regardless of income or need, will be eligible. And with the government willing to pick up the tab, many companies currently offering retiree drug benefits will drop them or scale them back.
Back when Congress was debating the law in the summer of 2003, it added a provision that would pay companies up to $1,330 per retiree, tax-free, as long as the company maintains a drug benefit at least as good as the new Medicare benefit.
This could be an extremely sweet deal for companies, but not for retirees who need the drugs. As the Wall Street Journal put it on Jan. 28, "employers can receive substantial government subsidies for their retiree health plans even if they raise the out-of-pocket costs to those retirees."
So retirees could be spending more for their drug coverage, while taxpayers would have to pick up the bill for these expensive subsidies. That's a lose-lose situation, one that's expected to cost taxpayers $71 billion over the next 10 years.
(Excerpt) Read more at cnsnews.com ...
If you think medicine is expensive, wait until it is free.
If you think medicine is expensive, wait until it is free.
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