Thursday, May 06, 2010

Sorry, That Number is no Longer in Service

Ever wonder what "big business" thinks of Obamacare and why they may be supportive of this change?

Perhaps it is because they can save a lot of money, and headache, by simply dropping health insurance for their workforce and paying the fine.

CNN/Money is reporting that folks like AT&T, Verizon and others are giving serious consideration to ending the long time practice of including health insurance in their wage package.

Internal documents recently reviewed by Fortune, originally requested by Congress, show what the bill's critics predicted, and what its champions dreaded: many large companies are examining a course that was heretofore unthinkable, dumping the health care coverage they provide to their workers in exchange for paying penalty fees to the government.

No reason to believe the rocket surgeons in Washington expected that to happen.

Some would say this was part of their master plan to take over health care. Personally, I don't believe they are that smart.

This follows the law of unintended consequences.

And here is the real kick in the ass. The penalties they collect won't even come close to funding Obamacare.

AT&T produced a PowerPoint slide entitled "Medical Cost Versus No Coverage Penalty." A document prepared for Verizon by consulting firm Hewitt Resources stated, "Even though the proposed assessments [on companies that do not provide health care] are material, they are modest when compared to the average cost of health care," and that to avoid costs and regulations, "employers may consider exiting the health care market and send employees to the Exchanges."

Reminds me of Alice's Restaurant where Office Obie walked in with "twenty seven eight-by-ten color glossy pictures with circles and arrows and a paragraph on the back of each one."

The difference here being, instead a judge walking in with a seeing eye dog it is the Congress Critters who won't be able to see what they have done.

In a competitive labor market, the employers that shed their plans will need to give their employees a big raise, and those raises could be higher, even after taxes, than the premiums the employees will pay in the exchanges.

Don't count on it Bocso. As long as unemployment remains high and the economy sluggish, I would not anticipate "big raises".

As Oliver Hardy was so fond of saying, this is another fine mess you have gotten us in to.
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