When Medicare Part D passed, the government gave private companies subsidies to induce them to keep retirees on private health care that covered prescriptions, toward the end of saving Medicare money by keeping those people off the prescription drug benefit rolls. Obamacare reduced these subsidies considerably, and moreover, made this income taxable.
Add it up and it will cost big companies we need to create jobs–like Caterpillar and Deere–hundreds of millions (if not ultimately more). And it will cost us as many of these people may lose their retirement prescription drug coverage benefit, forcing them into Medicare. From the story:
It hasn’t even been a week since President Obama signed sweeping health care legislation, but several companies already have warned shareholders they expect to take a hit. Manufacturer John Deere announced Thursday that it expected the company’s expenses to be about $150 million higher than last year. That came a day after Caterpillar predicted a new cost of $100 million, and two days after AK Steel predicted a charge of $31 million. “Having an additional cost like this is not great timing,” Caterpillar spokesman Jim Dugan said…
Most of the new costs will come in a reduction in subsidies that about 1,400 companies receive for providing drug coverage to their retirees. In an effort to raise several billion dollars for implementing the health care package, the law makes those subsidies taxable, just like income…
The new law does not have an immediate effect on retirees and their benefits. But 10 top companies, including Caterpillar, John Deere, Verizon, Xerox, Boeing and Met Life, warned Congress in December that over the long term, it would. “Taxing the subsidy means that more companies will eliminate or reduce the coverage,” they warned, “and more retirees will shift to Medicare … which will create more cost for both the government and the retirees.”
Obamacare won’t save money, it will cost it. It won’t create jobs in a bad economy, it will stifle job creation. Money won’t be saved by the government, it will add to the ongoing bankruptcy of the once greatest economy in the history of the world.
Repeal. Reform. Replace.