But I Thought This Was The [Secret] Plan?
Sometimes this gets tiring. I’m getting a bit sick of showing that bad consequences, entirely foreseeable (and possibly planned) and predicted, are coming to fruition — and the power-brokers in Washington have the gall to actually act appaled?
The great mystery surrounding the historic health care bill is how the corporations that provide coverage for most Americans — coverage they know and prize — will react to the new law’s radically different regime of subsidies, penalties, and taxes. Now, we’re getting a remarkable inside look at the options AT&T, Deere, and other big companies are weighing to deal with the new legislation.
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.
Of course, the pols in Washington didn’t want this to come to light too quickly:
In the days after President Obama signed the bill on March 24, a number of companies announced big write downs due to some fiscal changes it ushered in. The legislation eliminated a company’s right to deduct the federal retiree drug-benefit subsidy from their corporate taxes. That reduced projected revenue. As a result, AT&T (T, Fortune 500) and Verizon (VZ, Fortune 500) took well-publicized charges of around $1 billion.
The request yielded 1,100 pages of documents from four major employers: AT&T, Verizon, Caterpillar and Deere (DE, Fortune 500). No sooner did the Democrats on the Energy Committee read them than they abruptly cancelled the hearings. On April 14, the Committee’s majority staff issued a memo stating that the write downs were “proper and in accordance with SEC rules.” The committee also stated that the memos took a generally sunny view of the new legislation. The documents, said the Democrats’ memo, show that “the overall impact of health reform on large employers could be beneficial.”
Nowhere in the five-page report did the majority staff mention that not one, but all four companies, were weighing the costs and benefits of dropping their coverage.
An optimist — or a rube — would suggest that this is an unintended consequence of the legislation. That, after all, all of their cost estimates were based on employers largely keeping their employees on their own plans. And, after all, this bill was but a small move to cover those who were uncovered, not an attempt to overtake the American health care system in toto. That’s what they said, right?
Many said that the goal of the legislators was to get employers to toss their employees onto the exchanges, but it was denied. So why is it that rather than string these employers up in front of Congress, vilifying them for being uncaring profit-whores who would throw their employees on the hands of the government exchanges, Waxman swept this under the rug and canceled the hearings?
Could it be that these discussions weren’t the unplanned, unintended consequences of the legislation? That maybe this really was the intent?