A question on retirees drug benefits: Companies might drop drug coverage

[vaberella]

I've been given this article and I can't find anything refuting this future problem.

That retirees may be dropped from pharmaceutical coverage because of new bill.

With more than 3,500 companies now getting the tax break as an incentive to keep providing coverage, others are almost certain to announce similar cost increases in the weeks ahead as they sort out the impact of the change.

Figuring out what it will mean for retirees will take longer, but analysts said as many as 2 million could lose the prescription drug coverage provided by their former employers, leaving them to enroll in Medicare's program.

For the government, the tax changes are expected to raise roughly $4.5 billion over the next decade to help pay for the health overhaul. Some of the savings would be negated by retirees enrolling in the Medicare plans.

"You're increasing the incentive for companies to say 'We don't want to be in the health care business any more,"' said James Gelfand, senior manager of health policy for the U.S. Chamber of Commerce, which fought the overhaul.

http://www.themorningsun.com/articles/2010/03/28/business/srv0000007903768.txt

[tritsofme]

1. It seems likely that employers will shift more retirees into Part D.

I have no idea on how the benefits packages compare between Part D and what employers offer, but I do know that the healthcare bill does make improvements in Part D, including closing the "donut hole".

[vaberella]

2. Interesting. Thanks for letting me know. Now we have to figure out what Part D does. n/t

[flpoljunkie]

3. Daily Kos mcjoan has a great post up now on this...

Will HIR Really Cost Corporations Millions?
by mcjoan

Mon Mar 29, 2010 at 05:30:04 PM PDT

As fast out of the gate post-HIR passage as the insurers claiming they don't have to cover sick kids, were some of the nation's biggest corporations, claiming the measure was going to bankrupt them. While the Chamber of Commerce might not be interested in directly funding a repeal campaign, that's not going to stop member corporations from boosting the effort.

AT&T Inc., Verizon Communications Inc., Caterpillar Inc. and Deere & Co. have all said that the reform will cost them "millions, if not billions of dollars" because of a change in the subsidy employers have received from the government to provide retirees prescription drug coverage plans in Medicare part D. The clearest explanation, and debunking, comes form MarketWatch:

As explained in plain English in today’s Wall Street journal, “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.”

Let me ask a question of readers here in even plainer English: Can anybody actually be upset about the fact that giant corporations have to stop taking tax deductions for welfare checks they get for providing health care to their employees and retirees?

Imagine if you will, the government sending you a check to pay for your prescription drugs and then you getting to deduct that amount from your income tax statement. HEY, BIG GOVERNMENT, KEEP YOUR DAMN HANDS OFF MY SUBSIDIES AND ENTITLEMENTS!

So it ends double-dipping for these huge corporations. And of course someone can be upset about the fact that giant corporations have to stop taking tax deductions for the subsidies they receive--it's the perfect issue for John Boehner to express his outrage over. Because, of course, subsidies and tax breaks to the nation's behemoth corporations is more important than not increasing the deficit while expanding health insurance coverage.

Boehner seems mostly outraged that Henry Waxman is going to give these companies the opportunity to prove their claims at a House hearing when Congress resumes after recess. Waxman's letter reads, in part:

The new law is designed to expand coverage and bring down costs, so your assertions are a matter of concern. They also appear to conflict with independent analyses. The Congressional Budget Office has reported that companies that insure more than 50 employees would see a decrease of up to 3% in average premium costs per person by 2016. The Business Roundtable, an association of chief executive officers from leading U.S. companies, asserted in November 2009 that health care reform could reduce predicted health insurance cost trends for businesses by more than $3,000 per employee over the next ten years.

How dare Henry Waxman browbeat CEOs with facts?!?!?!?! This should be a fun hearing.

http://www.dailykos.com/storyonly/2010/3/29/852157/-Will-HIR-Really-Cost-Corporations-Millions

[Kdillard]

4. Thanks very much I had been reading this talking point and it addresses my

Concerns.

[vaberella]

5. Thanks for this. n/t

[daa]

8. The reason that Bush and Congress put

the double-dipping in was so that companies had an incentive NOT to drop retiree drug coverage. Part D is typically not as good as the company provided plans (that often limited out of pocket costs) so there will be pissed off seniors.

[golfguru]

6. This might be good news to me!

If my compaqny drops my drug coverage, it won't bother me!!
Currently I can buy 3 months supply of my medication for HBP
at Wal-Mart for 10 bucks!

If they drop my coverage they should drop my premiums more than
$40/year so this is just fine.

[vaberella]

7. I'm glad this works out.

I wasn't sure how it was a good thing until I saw post # 3.

[windbreeze]

9. The way this worked for the two of us...

When we hit 65, we were automatically thrown onto Part D...by our retiree health insurance program...we were NOT given a choice...and part of the premium we pay for our retiree health insurance in turn pays for the Part D..we pay $6 for a prescription...I can't and won't bitch about any of it, because between Medicare and our private insurance...we make out pretty good for health bills...BUT....it's costing us about $600 out of our income every month to maintain both insurances...how all or any of this will affect us...I don't know...apparently our retiree health insurance wasn't getting the subsidies others were, or they wouldn't have thrown us onto Part D at 65...so maybe it won't affect us at all....our health insurance is also a self financing trust...wb