Remember how the original propaganda put forth by Democrats was that ObamaCare was needed to lower the cost of “spiraling” health care? Well most of us with the ability to operate a calculator knew that wasn’t going to happen and now several news reports are confirming it.
Take this, for example, from the AP about a spike in health insurance premiums for young adults:
CHICAGO — Health insurance premiums for young adults are expected to rise about 17 percent once they’re required to buy insurance four years from now. That estimate is from an analysis by Rand Health.
Young people will need to carry more of the burden of health care under the new health overhaul law. The new law limits an industry practice of charging older customers more.
Translation: If you are young, healthy and don’t need to visit the doctor much, you will be paying the bill for the people are not healthy and do need to visit the doctor frequently. Your wealth will be transferred to pay the health care costs for other people at a disproportionate rate.
Remember though, ObamaCare is also going to give us all raises:
That is the essence if brilliance, my friends, brilliance.
AT&T also stated this week that ObamaCare would cost them $1 billion with regard to earnings and the new plan, from the WSJ:
AT&T Inc. said it would take a $1 billion charge against earnings tied to the federal health-care overhaul, joining a number of other companies in reporting an impact from the bill signed into law this week.
The charges relate to prescription-drug benefits for retirees. Companies that provide this benefit, as AT&T does, receive a federal subsidy, plus they can deduct the value of this subsidy from their taxes. The health overhaul cancels the deductibility of the subsidy.
It is for that reason that companies are taking a charge against earnings. They “have a stream of tax benefits that they are losing way out into the future,” said Roland McDevitt, director of health-care research at benefits consultant Towers Watson.
On Friday, 3M Co. joined AT&T in saying it would take a first-quarter charge, in 3M’s case of $85 million to $90 million. Deere & Co., Caterpillar Inc. and AK Steel Holding Corp. also said they were taking such charges.
AT&T’s is much larger than the others’ because it has far more current and future retirees, and a large number of them are unionized, with guaranteed benefits.
The charges are “noncash,” meaning companies don’t have to write a check. But ultimately their tax bills will be higher given the change in tax treatment of the drug-benefit subsidy.
What happened to Obama’s promise of cutting premiums by a ridiculous “3,000%” so these employers can hand out raises left and right?
Of course, we also know about Caterpillar’s $100 million non-cash charge also, from Reuters:
LOS ANGELES, March 24 (Reuters) – Caterpillar Inc (CAT.N) said on Wednesday it sees a roughly $100 million after-tax charge to earnings in the first quarter as a result of a new law that will lower the company’s tax deductions.
The new rule, beginning in 2011, will increase the company’s expected taxes under the newly-signed Patient Protection and Affordable Care Act.
Wall Street expects the world’s largest maker of construction and mining equipment to post a net income of almost $280 million or 40 cents a share in the quarter ending March 2010, according to Thomson Reuters I/B/E/S.
The sad part here is that it isn’t just massive international conglomerates like AT&T and Caterpillar feeling the pinch, many smaller medium sized firms are also being smacked with new ObamaCare taxes and changes in the law.
Take Allegheny Tech, for example, in this report from the AP:
PITTSBURGH — Metals processor Allegheny Technologies Inc. said Monday that it plans to take a $5 million non-cash charge in the first quarter related to the health care overhaul legislation.
Under the new law, companies will have to start paying taxes on a government subsidy they receive for providing drug benefits to retirees.
Allegheny said while this tax benefit won’t be eliminated until 2013, it is required by accounting rules to book the expected charge, which will amount to 5 cents per share, in the first quarter.
Several other companies, including AK Steel Corp., AT&T Inc., Caterpillar Inc., Deere & Co. and Valero Energy have announced similar charges.
The list of companies being hit with this new provision is going to be endless. These reports, each and every one of them, fliy in the face of Obama’s claim that ObamaCare will reduce the burden on employers with regard to health care costs.
In fact, despite not even fully being in effect, companies are already bracing for the increased taxes they will be paying under ObamaCare. Something tells me they won’t be rolling this into raises for their current employees. Instead, the government is getting a raise in revenue by thieving this money to pay for an epic failure of a program.
What this all boils down to is a slow down in hiring and the potential for each and every one of these companies to begin laying off employees to cover the difference. It is already happening at Caterpillar.
ObamaCare will not reduce costs nor will it create jobs. It will do the exact opposite as often is the case with any government program.