Yesterday the White House went bonkers when several large corporations announced via their SEC filings that they were taking about $1.5 Billion in losses this quarter because of one provision in the health care takeover bill Obama signed into law last week. The Wall Street Journal estimates Obamacare will cost the Fortune 500 some $14 Billion in this single provision.
They trotted out the hapless Commerce Secretary, Gary Locke, to deny basic laws of economics and according to some reports White House aides were directly calling and berating company executives who were complying with federal law.
Henry Waxman took a brief hiatus from braiding his nose hair to announce that he would hold hearings to determine why these imbeciles had fraudulently declared Obamacare would cost them money when everyone knows it is the key to balancing the budget and retiring the national debt. According to him:
The new law is designed to expand coverage and bring down costs, so your assertions are a matter of concern. They also appear to conflict with independent analyses.
In fact, Waxman asserts that the losses run counter to a report prepared by the Business Roundtable predicting the health care takeover would reduce health insurance costs to businesses by $3,000 per person:
The Business Roundtable, an association of chief executive officers from leading U.S. companies, asserted in November 2009 that health care reform could reduce predicted health insurance cost trends for businesses by more than $3,000 per employee over the next ten years.
As the head of the Business Roundtable helpfully points out, that really isn’t the case.
To set up what happened over the past few days you have to go back to the basic predicate that kept the BRT “at the table” throughout the health care reform debate. Our companies already provide health insurance for 35 million employees, retirees and their families. For us, the economic burden of sky rocketing costs dictated our continuing efforts to get the legislation right so that we could continue to provide coverage and still compete in the international marketplace.
Buried within the legislation is a provision which applied a new tax on companies who provided prescription drug benefits to their retirees as part of the Medicare Part D law. That law gave a tax incentive for companies to provide this benefit in a way much less costly than if the retirees went directly to Medicare. From the beginning, we warned Congress and the Administration that if this tax was imposed one of two bad things would happen: either companies would have to restate their retiree benefit cost reserves (an accounting standard), or they would have to drop this coverage.
No fewer than three objective studies were presented to Congress and Administration negotiators, including one analysis done for us by Hewitt Associates. The general conclusion is that the immediate reduction to earnings reported in 2010 could be $2,800 for every retiree and that the national total could be nearly $14 billion almost immediately—all to raise $2.5 billion starting in 2013.
So what happened? Exactly what we said would. Several companies announced last week they would be taking hundreds of millions, even a billion dollar hit to earnings. The absurdity was that it triggered cries of indignation from Congress that it was a play to undermine the new law. One congressional committee has even scheduled a hearing. Why? To get to the bottom of exactly what we said would happen.
In fact, the report states clearly that the “if properly enacted, the right reforms” could reduce health care outlays. Obamacare fails, definitionally, on both counts.
We are at a stage of the health care debate where the thoroughly stump-trained CBO’s twenty year predictions of an economic Golden Age are meaningless. What matters now is the criminally irresponsible law that our criminally irresponsible president signed.
Regardless of where one stands on the health care takeover the fact remains that most Americans receive health insurance through their employer. One would think, then, that it would be in the best interests of anyone trying to expand health insurance coverage to make the associated expense as low as possible. The only conclusion one can draw from the inclusion of extortionate financial demands being made upon employers by law, rather than by implementing regulation, is that the health care takeover bill is actually designed to make employers reduce their insurance expenses and set up a demand for a complete federal takeover of the health care system.
When following this debate one is struck by a story Ronald Reagan used to tell about the way Democrats treat productive members of our society. Here I’ll close in the voice of P. J. O’Rourke:
A traveling salesman stays overnight with a farm family. When the family gathers to eat there’s a pig seated at the table. And the pig has three medals hanging around his neck and a peg leg. The salesman says, “Um, I see you have a pig having dinner with you.”
“Yes,” says the farmer. “That’s because he’s a very special pig. You see those medals around his neck? Well, the first medal is from when our youngest son fell in the pond, and he was drowning, and that pig swam out and saved his life. The second medal, that’s from when the barn caught fire and our little daughter was trapped in there and the pig ran inside, carried her out and saved her life. And the third medal, that’s from when our oldest boy was cornered in the stock yard by a mean bull, and that pig ran under the fence and bit the bull on the tail and saved the boy’s life.”
“Yes,” says the salesman, “I can see why you let that pig sit right at the table and have dinner with you. And I can see why you awarded him the medals. But how did he get the peg leg?”
“Well,” says, the farmer, “a pig like that–you don’t eat him all at once.”