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Thread: So much for Obama's health Care Plan

  1. #1
    Member Mr. Lackawanna's Avatar
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    So much for Obama's health Care Plan

    Companies say health care costs hard to swallow
    By JOSH FUNK (AP)

    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.

    White House spokesman Robert Gibbs defended the tax law change Thursday, saying the original provision allowing companies to deduct the federal subsidies from their taxable income was a "loophole" that will be closed by the health care overhaul.

    For the government, the tax changes are expected to raise roughly $4.5 billion over the next decade to help pay for the health overhaul. Some of the savings would be negated by retirees enrolling in the Medicare plans.

    "You're increasing the incentive for companies to say 'We don't want to be in the health care business any more,'" said James Gelfand, senior manager of health policy for the U.S. Chamber of Commerce, which fought the overhaul.

    American industrial companies that are struggling to compete globally against companies with much lower labor costs are particularly likely to eventually drop retiree coverage, said Gene Imhoff, an accounting professor at the University of Michigan.

    "Anything that they can use to justify pushing something away from the employees, pushing it back on the employees or the government, they're going to do it," Imhoff said. "I'm not sure you can really blame them for trying to do this."

    Caterpillar spokesman Jim Dugan said the company is still studying the health care law and doesn't yet know what the full impact will be. But he acknowledged that benefit changes are possible.

    "Obviously, there's greater cost pressures on us that could drive changes to plans, but we haven't made any decisions on that," Dugan said.

    Spokesmen for Deere and Valero said it was to soon to say how the change would affect the benefits they offer retirees.

    When Congress approved the Medicare prescription drug program in 2003, it included government incentives for employers to provide drug benefits to retirees so the public system wouldn't be overwhelmed. Employers that provide prescription drug benefits for retirees can receive subsidies covering 28 percent of eligible costs; those subsidies totaled $3.7 billion in 2008.

    Under the 2003 law, companies could deduct the entire amount they spent on the drug benefits from their taxable income — including the government subsidy, an average of $665 per retiree.

    The health care law signed by President Barack Obama on Tuesday prohibits companies from writing off the subsidies starting in 2011, meaning they will no longer be able to deduct them from their taxable income.

    For example, if a company spent $100 on benefits, including a $28 government subsidy, it could write off the full $100 on its taxes under the old rules. The new rules would allow the same company to write off only $72.

    The follow-up health care bill to reshape parts of the overhaul would delay the changes until 2013.

    As many as 1.5 million to 2 million retirees could lose the drug benefits provided by their former employer because of the tax changes, according to a study by the Moran Company, a health care consulting firm.

    James Klein, president of the American Benefits Council, said between 6 million and 7 million retirees currently get the benefits. But the number of companies offering them has been dwindling for years.

    Generally, retirees would prefer to stay with prescription drug coverage provided by their companies as opposed to enrolling in a Medicare Part D plan, said Marilyn Moon, a health care economist with the nonpartisan American Institutes for Research.

    She said most of the company-sponsored plans are more generous and almost none have the coverage gap that comes with Part D plans.

    "That's particularly painful and problematic for people who have substantial expenses at any one point in time," she said.

    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.

    That financial hit will be a one-time cost as companies report a new cost estimate for the benefits over the life spans of all retirees.

    Deere and Caterpillar were among a group of 10 companies that sent a letter to congressional leaders in December warning of the cost increases. The others were Boeing Co., Con-Way Inc., Exelon Corp., Navistar Inc., Verizon, Xerox Corp., Public Service Enterprise Group Inc. and MetLife Inc.

    Most of the other companies that signed the letter said Thursday that it was too soon to estimate their costs. A number of other major U.S. companies also said they did not know how much the tax change would cost them. Some companies might wait until they release their earnings reports next quarter to address the costs so they have time to review the entire law.

    The companies that signed the December letter warned that changing the way retiree drug benefits are subsidized would have a broad impact on the economy, and there are already indications that the effects will trickle down to individuals.

    Consumers Energy, a Michigan gas and electric company with 2.9 million customers, said it will not take a big first-quarter charge because, like most utility companies, it can try to recover the added costs from its customers through rate hikes.

    AP Business Writers Daniel Wagner in Washington, Tom Murphy in Indianapolis and Tom Krisher in Detroit and Associated Press Writers Stephen Ohlemacher and Ricardo Alonso-Zaldivar in Washington contributed to this report.

    Copyright © 2010 The Associated Press. All rights reserved


    Did you notice that Consumers Energy will pass the increased cost to their 2.9 million customers. The public sector health care will fold once the private sector finds out how much this health care plan will really cost. Then the entire health care plan will then be under government control, which is what Obama wanted in the first place, a national health care plan. We as a nation should beware of any politician bearing gifts.
    Russia didn't make me vote for Trump, Hillary did.

  2. #2
    Member PickOranges's Avatar
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    I get VA healthcare.

    Let Deere & Co., Caterpillar Inc. and Valero Energy pay for it. I am sure each one of them made a killing in Iraq and Afganistan.

    Let companies like Hilliburton pay for it too out of their big profits. In fact, I like to see the dividends and profits go to the vet's disability pensions.
    Kiss someone that's different. It helps.
    Lets get the facts first, then go for the jugular!!
    It's all transparent, just read between the lines..

  3. #3
    Member Bioguy231's Avatar
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    Last year Deere did over $23 billion in sales and Caterpillar did over $32 billion in sales. But neither even showed a billion in profit. That's pathetic! When profits get that small (less than 5% of sales) it becomes a fine line between making money and losing money.

    Yea, let's put the screws to Deere and Cat and drive them out of business.

    Or, better yet, let's drive them to move all of their manufacturing to China.

    In fact, let's just get rid of all American manufacturing companies!
    Government is not the solution to our problem. Government is the problem. Ronald Reagan

  4. #4
    Member Mr. Lackawanna's Avatar
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    Obama's plan

    Quote Originally Posted by Bioguy231 View Post
    Last year Deere did over $23 billion in sales and Caterpillar did over $32 billion in sales. But neither even showed a billion in profit. That's pathetic! When profits get that small (less than 5% of sales) it becomes a fine line between making money and losing money.

    Yea, let's put the screws to Deere and Cat and drive them out of business.

    Or, better yet, let's drive them to move all of their manufacturing to China.

    In fact, let's just get rid of all American manufacturing companies!
    With the direction Obama is taking this country that is where all the companies that are making a profit will leave and go to a country that is more business friendly
    Russia didn't make me vote for Trump, Hillary did.

  5. #5
    Member Mr. Lackawanna's Avatar
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    Lets be fair

    Quote Originally Posted by PickOranges View Post
    I get VA healthcare.

    Let Deere & Co., Caterpillar Inc. and Valero Energy pay for it. I am sure each one of them made a killing in Iraq and Afganistan.

    Let companies like Hilliburton pay for it too out of their big profits. In fact, I like to see the dividends and profits go to the vet's disability pensions.

    Why not share the pain and have a national sales tax on all products sold in this country.
    Russia didn't make me vote for Trump, Hillary did.

  6. #6
    Member Bioguy231's Avatar
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    Quote Originally Posted by Mr. Lackawanna View Post
    Why not share the pain and have a national sales tax on all products sold in this country.
    That's been discussed already.......OUCH!!!!!
    Government is not the solution to our problem. Government is the problem. Ronald Reagan

  7. #7
    Member mikenold's Avatar
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    Quote Originally Posted by Mr. Lackawanna View Post
    With the direction Obama is taking this country that is where all the companies that are making a profit will leave and go to a country that is more business friendly
    Really we should just take all the profits from any company that shows a profit and, as a matter of fact, individuals should not be taking any income home either. Just put everyone on public assistance, force all business out of the country and then we can just rely on government for everything!!!

    Oh, wait, if we do that there won't be anyone around to pay the bill. Haven't we learned anything from states like NY, CA, and MI? NY can't even pay the wage earners that gave them too much tax money this past year because they spent that along with the actual tax collected and they are still 1 billion short.
    **free is a trademark of the current U.S. government.

  8. #8
    Member PickOranges's Avatar
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    This is a big difference btw people who work and just can't afford the premiums and those who never do anything but collect all the freebies...
    Kiss someone that's different. It helps.
    Lets get the facts first, then go for the jugular!!
    It's all transparent, just read between the lines..

  9. #9
    Member mikenold's Avatar
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    Quote Originally Posted by PickOranges View Post
    This is a big difference btw people who work and just can't afford the premiums and those who never do anything but collect all the freebies...
    Doesn't everyone get health care under Obummers plan?
    **free is a trademark of the current U.S. government.

  10. #10
    Member NBuffaloResident's Avatar
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    Quote Originally Posted by mikenold View Post
    Doesn't everyone get health care under Obummers plan?
    No. There's still 6-4% who wont get covered by this plan. Down from 20-25% of those who currently don't.

    You really need to read my friend. All of this has already been covered by the CBO's report: How much it costs, how much it saves, how many people get covered, etc, etc.

    And, if you read the law, it also talks about how it accomplishes that. I bet you won't find government takeover of health care in there, either
    Raptor Jesus: He went extinct for your sins.

  11. #11
    Member PickOranges's Avatar
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    Quote Originally Posted by mikenold View Post
    Doesn't everyone get health care under Obummers plan?
    I know exactly what you are saying.

    Just so you know...You can be on welfare and refuse to work.. They will close your cash assistance and foodstamps but not your MEDICAID in NYS.

    That is one of the cadillac options that NYS wants everyone to pay for. Clinton changed this but NYS decided to continue it.

    I am sure any welfare worker who knows the laws will verify it.. That is how potent the Unions, lobbyists , Doctors and healthcare people are in NYS.
    Kiss someone that's different. It helps.
    Lets get the facts first, then go for the jugular!!
    It's all transparent, just read between the lines..

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    Member mikenold's Avatar
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    Quote Originally Posted by NBuffaloResident View Post
    No. There's still 6-4% who wont get covered by this plan. Down from 20-25% of those who currently don't.

    You really need to read my friend. All of this has already been covered by the CBO's report: How much it costs, how much it saves, how many people get covered, etc, etc.

    And, if you read the law, it also talks about how it accomplishes that. I bet you won't find government takeover of health care in there, either
    The CBO is a joke. I don't even read the funny papers on Sunday!
    **free is a trademark of the current U.S. government.

  13. #13
    Member NBuffaloResident's Avatar
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    Quote Originally Posted by mikenold View Post
    The CBO is a joke. I don't even read the funny papers on Sunday!
    Ah, where do you think the numbers to support the notion that Social Security and Medicaid are "failures" or "on the brink of bankruptcy"?

    Or, who do you think published numbers about Reagan's term in office about the economy?

    Because, if you think the CBO is "a joke", you can't use their data when it supports your idea...

    I understand though, it's called "Double-think". You should read 1984, because you would make a good Party Member. You might even be able to cut it in the Inner Party.
    Raptor Jesus: He went extinct for your sins.

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    Member mikenold's Avatar
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    Quote Originally Posted by NBuffaloResident View Post
    Ah, where do you think the numbers to support the notion that Social Security and Medicaid are "failures" or "on the brink of bankruptcy"?

    Or, who do you think published numbers about Reagan's term in office about the economy?

    Because, if you think the CBO is "a joke", you can't use their data when it supports your idea...

    I understand though, it's called "Double-think". You should read 1984, because you would make a good Party Member. You might even be able to cut it in the Inner Party.
    I find it very difficult to believe anything the government tells me in this day of lies coming from every level of the Obama administration.
    **free is a trademark of the current U.S. government.

  15. #15
    Member NBuffaloResident's Avatar
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    Quote Originally Posted by mikenold View Post
    I find it very difficult to believe anything the government tells me in this day of lies coming from every level of the Obama administration.
    Ah, since it's coming from the Obama administration, it's all lies. I bet it was "Honest Injun" before the Black Man got into office, huh?
    Raptor Jesus: He went extinct for your sins.

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