Posted on 07/30/2013 5:42:43 AM PDT by IBD editorial writer
Cost-Shifting: Looks like Detroit might get a federal bailout after all, by offloading its retiree health costs onto federal taxpayers via ObamaCare. It's a window into why Obama-Care costs will quickly spiral out of control.
On Sunday, the New York Times noted that Detroit hopes to push its younger retirees who aren't yet eligible for Medicare into the ObamaCare exchanges, where many will be eligible for subsidized insurance. Federal tax payers will pick up the tab, rather than those in Detroit.
(Excerpt) Read more at news.investors.com ...
What if congress doesnt authorize increasing amounts of money for it? Its not like medicare is it?
It helps non-producing citizens... Isn’t that Obama’s goal?
“It’s a window into why Obama-Care costs will quickly spiral out of control.”
Right after Obamacare passed the HR manager told me that the Fortune 500 company I worked for was planning on dropping all insurance as soon as it kicked in and putting everybody on Obamacare with a self-paid medical account that takes advantage of some tax loophole. (I think you don’t pay taxes on the money you put into it, but if you don’t use it you lose it. The intention is you get a tax break on things Obamacare won’t cover.)
I’d guess that every company must drop health insurance if their competitors do. Otherwise, they’re at a competitive disadvantage. Also, they have to do it first, as it takes a year to get out of your insurance. A year of higher rates than your competitors could put you out of business.
The small company I worked for before retiring was strongly considering dropping company paid medical and paying the penalty.
If the bankruptcy plays out in court as filed (and as expected by many), unfunded (primarily union) pensions will probably take precedence over the general obligation bondholders, and may well take precedence over the secured debt. Up to now, general obligation municipal bonds have always been given priority over other forms of unsecured debt, such as pensions.
This effective shifting of the burden of the city council's fiscal irresponsibility will have a terrible impact on the muni market -- causing existing bond prices to crash, interest rates to soar, and sales of new obligations to pretty much dry up.
and now comes Chicago, La, Philly, etc, etc.
Hey Bam Bam! Economics is not a conspiracy theory!
But see, that's perfect because it will be getting even w/ those evil banksters, you know, like everyone's 401Ks and pension plans.
Its win-win for the do-nothings/know-nothings.
Either way, economic growth will be stunted, making ObamaCare a lose-lose for everyone.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.