This from today's Wall Street Journal:
Democrats dragged themselves over the health-care finish line in part by repeating that voters would like the plan once it passed. Let's see what they think when they learn their insurance costs will jump right away.
Even before President Obama signed the bill on Tuesday, Caterpillar said it would cost the company at least $100 million more in the first year alone. Medical device maker Medtronic warned that new taxes on its products could force it to lay off a thousand workers. Now Verizon joins the roll of businesses staring at adverse consequences.
In an email titled "President Obama Signs Health Care Legislation" sent to all employees Tuesday night, the telecom giant warned that "we expect that Verizon's costs will increase in the short term." While executive vice president for human resources Marc Reed wrote that "it is difficult at this point to gauge the precise impact of this legislation," and that ObamaCare does reflect some of the company's policy priorities, the message to workers was clear: Expect changes for the worse to your health benefits as the direct result of this bill, and maybe as soon as this year.
In its employee note, Verizon also warned about the 40% tax on high-end health plans, though that won't take effect until 2018. "Many of the plans that Verizon offers to employees and retirees are projected to have costs above the threshold in the legislation and will be subject to the 40 percent excise tax." These costs will start to show up soon, and, as we repeatedly argued, the tax is unlikely to drive down costs. The tax burden will simply be spread to all workers—the result of the White House's too-clever decision to tax insurers, rather than individuals.
A Verizon spokesman said the company is merely addressing employee questions about ObamaCare, not making a political statement. But these and many other changes were enabled by the support of the Business Roundtable that counts Verizon as a member. Verizon CEO Ivan Seidenberg's health-reform ideas are 180 degrees from Mr. Obama's, but Verizon's shareholders and 900,000 employees and retirees will still pay the price.
Businesses around the country are making the same calculations as Verizon and no doubt sending out similar messages. It's only a small measure of the destruction that will be churned out by the rewrite of health, tax, labor and welfare laws that is ObamaCare, and only the vanguard of much worse to come.
Copyright 2009 Dow Jones & Company, Inc. All Rights Reserved
I expect that one of three things is true about this assertion that the immediate impact of the new reform package will increase health care costs:
- It's completely true.
- This is politically motivated, designed by corporate executives to begin to put pressure on employees in the hope that employees will channel their anger toward upcoming elections.
- It's a diversionary tactic by companies essentially already expecting escalating costs, but now finding an easy target in the new law.
Pick your poison...