Archive for 28 mars, 2010

Obama Care 26

28 mars, 2010

EDITORIAL: The Obamacare bait-and-switch

March 27, 2010

Campaign health plan promises fail reality test

The health care bill that President Obama signed last week bears little resemblance to the reform package he once touted from the campaign trail.

With the final legislative product in hand, it’s worth evaluating how it compares to the promises Mr. Obama made to voters regarding the plan’s cost, its features and the reform process itself. The difference between then and now couldn’t be more stark.

Candidate Obama repeatedly assured the public that his health care plan would cost between $500 billion and $650 billion. This modest amount was to be covered entirety by discontinuing the George W. Bush tax cuts for those earning more than $250,000 a year.

Today, we know that Obamacare will cost at least double that amount. The basic price tag is $940 billion over 10 years, to which one must add the $208 billion ”doc fix.” This adjustment to the reimbursement doctors receive under Medicare was separated out from the main package to hide Obamacare’s true cost.

Obviously, eliminating the Bush tax cuts isn’t what’s going to cover these enormous sums. Obamacare must cut Medicare and raise taxes on high-quality health insurance, medical devices, drugs and insurance companies. These increases will hit anyone who gets sick or buys insurance, regardless of income. So much for the promised ”middle-class tax cut.”

Mr. Obama is still trying to hide the extent of the bait-and-switch. During the campaign he said, ”If you like your plan and you like your doctor, you won’t have to do a thing…. You keep your plan; you keep your doctor.” While he repeated this claim in a speech in Iowa last week, he also reluctantly admitted when questioned more closely that, yes, people may well lose their plan or their doctor.

Even aspects of reform that candidate Obama sharply criticized in a 2008 primary debate with then-Sen. Hillary Rodham Clinton have become law. Mr. Obama claimed he was offended by the idea that every American should be forced to buy a government-approved health policy or face a fine. ”When Clinton says mandate, it’s not a mandate on government – it’s a mandate on individuals,” he said. ”… In some cases, people are paying fines, which means they can’t afford premiums, which means they don’t have coverage. … Both of us seek to get to universal health care. I have a substantive difference … on how to get there.”

The ”differences” between Sen. Clinton’s and Sen. Obama’s health care plans have disappeared. Households without a government-approved health care plan face a fine of $2,085. The promised transparency in the legislative drafting process also has disappeared despite the pledge, ”These negotiations will be on C-SPAN.” A one-day presidential infomercial hardly counts.

President Obama’s deals were cut behind closed doors without input from the public or even congressional Republicans – and for good reason. Lawmakers rushed through a plan that bears no resemblance to what voters once were promised.

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Obama Care 25

28 mars, 2010

MARCH 27, 2010

The ObamaCare Writedowns

The corporate damage rolls in, and Democrats are shocked!

It’s been a banner week for Democrats: ObamaCare passed Congress in its final form on Thursday night, and the returns are already rolling in. Yesterday AT&T announced that it will be forced to make a $1 billion writedown due solely to the health bill, in what has become a wave of such corporate losses.

This wholesale destruction of wealth and capital came with more than ample warning. Turning over every couch cushion to make their new entitlement look affordable under Beltway accounting rules, Democrats decided to raise taxes on companies that do the public service of offering prescription drug benefits to their retirees instead of dumping them into Medicare. We and others warned this would lead to AT&T-like results, but like so many other ObamaCare objections Democrats waved them off as self-serving or ”political.”

Perhaps that explains why the Administration is now so touchy. Commerce Secretary Gary Locke took to the White House blog to write that while ObamaCare is great for business, ”In the last few days, though, we have seen a couple of companies imply that reform will raise costs for them.” In a Thursday interview on CNBC, Mr. Locke said ”for them to come out, I think is premature and irresponsible.”

Meanwhile, Henry Waxman and House Democrats announced yesterday that they will haul these companies in for an April 21 hearing because their judgment ”appears to conflict with independent analyses, which show that the new law will expand coverage and bring down costs.”

In other words, shoot the messenger. Black-letter financial accounting rules require that corporations immediately restate their earnings to reflect the present value of their long-term health liabilities, including a higher tax burden. Should these companies have played chicken with the Securities and Exchange Commission to avoid this politically inconvenient reality? Democrats don’t like what their bill is doing in the real world, so they now want to intimidate CEOs into keeping quiet.

On top of AT&T’s $1 billion, the writedown wave so far includes Deere & Co., $150 million; Caterpillar, $100 million; AK Steel, $31 million; 3M, $90 million; and Valero Energy, up to $20 million. Verizon has also warned its employees about its new higher health-care costs, and there will be many more in the coming days and weeks.

As Joe Biden might put it, this is a big, er, deal for shareholders and the economy. The consulting firm Towers Watson estimates that the total hit this year will reach nearly $14 billion, unless corporations cut retiree drug benefits when their labor contracts let them.

Meanwhile, John DiStaso of the New Hampshire Union Leader reported this week that ObamaCare could cost the Granite State‘s major ski resorts as much as $1 million in fines, because they hire large numbers of seasonal workers without offering health benefits. ”The choices are pretty clear, either increase prices or cut costs, which could mean hiring fewer workers next winter,” he wrote.

The Democratic political calculation with ObamaCare is the proverbial boiling frog: Gradually introduce a health-care entitlement by hiding the true costs, hook the middle class on new subsidies until they become unrepealable, but try to delay the adverse consequences and major new tax hikes so voters don’t make the connection between their policy and the economic wreckage. But their bill was such a shoddy, jerry-rigged piece of work that the damage is coming sooner than even some critics expected.

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