Health Care Benefits
[Guest post by DRJ]
Obama — Health care benefits beginning:
“The most critical and controversial parts of the recently passed health care reform bill won’t take effect for more than three and half years, but President Barack Obama wants Americans to know that the historic legislation is already spurring positive changes in the insurance business.
“While it will take some time to fully implement this law, reform is already delivering real benefits to millions of Americans,” Obama said in his weekly radio and video address out Saturday morning. “Already, we are seeing a health care system that holds insurance companies more accountable and gives consumers more control.”
AT&T (via Doug Ross) — Health care benefits ending?:
“Someone inside AT&T leaked an internal Powerpoint presentation that measured the financial impact of DemCare.
AT&T estimates that it can save upwards of $4 billion annually by dropping health care coverage and paying the penalty tax instead.
They’d be foolish to keep their health care benefits and, in fact, shareholders should demand the company capture that income and return it in the form of increased dividends and R&D.”
The Administration may have its thumb on the insurance companies but it can’t control those Unintended Consequences.
— DRJ
Wait a second. The administration, and all of those doctors they paraded around wearing their lab coats (which proves that they’re doctors), and Mrs. (“we have to pass the bill so that you’ll know what is in it”) Botox Bitch By The Bay . . . NONE of them could forsee this kind of thing happening?
SHOCKA!!!
Icy Texan (d75ab1) — 5/9/2010 @ 3:59 amThis is exactly Obama’s hoped-for result.
This Administration is truly onerous.
krusher (0846f8) — 5/9/2010 @ 4:07 amAre you kidding?…”uintended consequences”…this has been his intention all along…what better way to get to their Utopia..the one payer system…come on Patrick you’re usually smarter than this
twinsdad (73bd8b) — 5/9/2010 @ 4:07 amYou may have a point, but please don’t criticize Patrick for something he didn’t write.
DRJ (d43dcd) — 5/9/2010 @ 4:19 amGetting rid of employer pays wouldn’t be a bad thing. If you think of it from a free market system it’s tough to support a system where I consume resources someone else buys. This is more true when you consider that the cost of my insurance isn’t transparent to me.
BUT, AT&T doesn’t offer insurance because the government makes them. They do it because they needed to do it to hire the people they wanted. If they cut their insurance they’ll not only pay the penalty, they’ll also have a harder time keeping/retaining the talent they want. They might do it anyway, but any analysis of costs that ignores that factor is pretty lacking. Now as the tax structure changes this might lessen. At the moment my company can buy me health care cheaper than I can buy it myself. So for each 1$ they spend I get 1.X% dollars in services.
My preferred system would be one where there was good, strong regulation of the insurance industry to make them clearly explain benefits and honor their agreements combined with a 3rd party reviewer that provided clear easy to understand comparisons of any plan. Plans that submitted to regulation and analysis would be eligible for entry into a nationwide marketplace. This would give us a decent free market shot at an insurance industry and since the user pays market forces would bring costs down. But we don’t have anything like this and I doubt we ever will.
time123 (066362) — 5/9/2010 @ 4:19 amMy preferred system would be to get rid of payers, such as Medicare and Medicaid, and to establish free walk-in hospitals and clinics across the country. Much like the VA but available to everyone.
It can work. I know for a fact veterans who go to my boutique doctor for their treatment and to their VA hospital for their medicines. I also know doctors, good doctors, who work for half market pay because of “no calls, no weekends, no medical malpractice insurance”.
nk (db4a41) — 5/9/2010 @ 4:30 amThere is no denying that the system we have now is totally screwed up. Did you know that you can be a cornea surgeon in private practice just all alone by yourself but if you want OR privileges in a hospital (which you must have) you have to abide by Medicare/Medicaid regulations including doing ER calls like you did when you were an intern?
nk (db4a41) — 5/9/2010 @ 4:35 amNK wrote:
Except that’s not the case. My ophthalmologist doesn’t have OR privileges at a hospital — at least, not of which I’m aware — and he did my eye surgery at a private minor surgery suite. It happens to be across the street from a hospital, so if I had crashed on the table, they could have gotten me there quickly, but I wasn’t in a “real” hospital.
The Dana who has had cataract surgery (474dfc) — 5/9/2010 @ 4:55 amAs I looked at the stories about the AT&T Power Point presentation, my first question — which was never answered, by the way — was: is this something being considered seriously by AT&T, or is this just someone putting together an alternative point to present?
You get inside a major company like AT&T and you can find all sorts of proposals which are never approved.
The Dana who doesn't jump to conclusions (474dfc) — 5/9/2010 @ 5:01 amI suspect it’s the latter, hence the “?” in the AT&T line.
DRJ (d43dcd) — 5/9/2010 @ 5:12 amwho go to my boutique doctor – Comment by nk — 5/9/2010
Just curious, was he/she your doctor in a more “traditional” practice and changed style after you were already a patient, or did you seek out such a doctor?
Over the last year my own physician has almost become inaccessible, even though a former colleague; this after years of gradually being more difficult to get in contact with him.
MD in Philly (ea3785) — 5/9/2010 @ 5:54 amI don’t know if the changes are all that positive, but things are changing.
My policies are being audited to confirm my eligibility for the coverage I carry. Now, it isn’t that I’ve never heard of that happening, but usually in conjunction with reason to suspect something ain’t quite kosher.
EW1(SG) (edc268) — 5/9/2010 @ 5:55 amMD in Philly, email me your email at njkrit@hotmail.com.
nk (db4a41) — 5/9/2010 @ 6:16 amMy non-boutique doctor, who saw patients for free, and even gave them money to buy food, was killed by an ambulance nine years ago.
My present boutiques are a result of my wife, certified by both Janet Reno and John Ashcroft as being vital to the national interest. You would recognize her name, I think.
nk (db4a41) — 5/9/2010 @ 6:25 amSoon we will start hearing Obama complain that his programs would work but for a lack of cooperation from business. He doesn’t understand why we have a free market.
Arizona Bob (e8af2b) — 5/9/2010 @ 6:50 amBob,
time123 (066362) — 5/9/2010 @ 7:07 amWe don’t have a very good market in health care. we sort of kinda ration it with money but we’re missing pricing signals and symmetrical information.
Henry Waxman changed his mind about parading the executives on C-SPAN after his staff got a look at those memos.
nk, all ophthalmologists I know have their own OR suites in their office or a surgery center. The newest guy/gal in town may take ER call for a while but eye emergencies are not too common.
Mike K (2cf494) — 5/9/2010 @ 7:53 amOur government; doing the job our enemies haven’t been able to do in over 200 years.
PatriotRider (814154) — 5/9/2010 @ 8:12 amI too think the results are intended. Single payer will be the cure to the government’s own self-imposed illness.
More than ever, I think this bill needs to be completely repealed. We have to let the free market do its job.
November or never.
Patricia (160852) — 5/9/2010 @ 8:34 amOne giant step for socialism and proof that to err is human.the plans goal has always not single payer “the govt.” but taxpayer funded healthcare.not everybody pays taxes so it is redistribution of wealth and a massive power grab to control all the stupid people who earn too much money without joining a union.
clyde (436837) — 5/9/2010 @ 8:59 amMost of the opthamologists I know have their own surgical suites, too, and several physicians have their own office buildings. At one point I think the reform bill was going to ban doctors from practicing/using their own buildings. If so, did that make it into law?
DRJ (d43dcd) — 5/9/2010 @ 9:34 am#5, no, AT&T doesn’t offer health insurance because the government forces them to, theydo it for two reasons; to attrack those in management who are good and because it is a union (CWA) negotiated benefit.
But since you are not familiar with those benefits, let me explain them to you.
AT&T estimates that for each union member they hire, that person costs them $10,083/yr in health care insurance costs. This does NOT include spouses or dependent children. So that cost goes up as the number of dependents go up. And those benefits do not cost the union worker anything, no matter the number of dependents.
The CWA was sending out one newsletter after another, pushing members to get out and support Obama care. What the CWA (Crap Weasels of America) did not count on was the wording of the “Cadillac” tax; they assumed, in their idiocy, that it would cover CWA members. It doesn’t. It only covers people who get their insurance from the union itself, not company sponsored health care insurance. So now a CWA member who works for AT&T, and has a couple of kids, is going to be receiving health care insurance benefits that will fall into the Cadillac tax bracket. Someone will be required to pay that 40% “surcharge” and I promise you, it will not be AT&T or any of the other companies that will be hit by it. And a funny thing happened on the way to CWA reality; right after the exact wording of the bill was revealed, instead of doing its usual victory lap over getting what it wanted from the Democrats, the next union letter said NOT ONE WORD about the health care bill. It was like CWA National woke up and said “Whoa, crap. This was not what we though it was. So don’t mention to the membership what we have done. Just move on.”
Now, let’s move on to AT&T retirees. Many of them are in their early 50’s as AT&T is currenly offering “retirement benefit” buyouts, sweetened with a year’s salary. This acheives the need to reduce the work force and not having to lay off less senior employees. It also puts those employees out of the contract “chain” as the CWA claims that while it tries to negotiate continued benefits for retirees, there is no legal requirement on AT&T to do so. With the last CWA/AT&T contract signed last year, retirees, for the first time in contract history, now have to pay a portion of their health care monthly premiums.
The first thing AT&T will do is drop retiree drug benefits. Allowing retirees to say on that program saves the age 65+ retiree from buying it through Medicare Part D. It also bridges the gap between retirement and reaching SS age. That benefit will probably go away in January, 2012, leaving many, many under 65 retirees without perscription insurance benefits. And will save the company $$$millions.
I would also say that the next step, after stopping Rx insurance, will be forcing retirees under 65 to either pick up the tab for their insurance, or not having it. Add to that the government mandated requirement that children be allowed to remain on their parent’s insurance to age 26, and you have a lot of AT&T early 50’s retirees who have kids that fit that notch. Currently, AT&T will cover kids up to age 21 as long as they are full time students. So the cost of insuring kids, at no expense to the employee, has just been extended by five years, not a small cost to companies. And how many active employees, who have less than the 30 years to retire, do you think have kids between 21-26? I can tell you, a lot of them.
The AT&T/CWA contract is up in 2014. I have no doubt that AT&T, if the terms of the Health Care Insurance Reform Bill are not changed, AT&T will spend the next five years implementing the technology that will make it possible to sustain a strike when AT&T says it is no longer going to pick up the tab (and increased costs) for health care insurance.
This whole thing is a lose/lose situation for AT&T hourly employees. Health care benefits are going to drastically decrease, or go away altogether because it will be cheaper on the company to pay the fines on just the employee (not dependents and spouses as they are not employees) AND jobs will be lost as the company will improve technology so some jobs will no longer be required.
The CWA put its trust in the Democrats, and got screwed. And in the process, the CWA has screwed its membership.
retire05 (2abfb2) — 5/9/2010 @ 9:38 amSorry for my post being so long (in describing the exact situation) and not being in paragraphs.
I don’t know what happened.
retire05 (2abfb2) — 5/9/2010 @ 9:39 amLimbaugh predicted this months ago. He said companies would start dropping their private health insurance to save money, pushing people into ObamaCare. I don’t recall much of our fine press corpse giving much ink to this effect of the legislation.
The next step, according to Limbaugh, is bankrupting the private insurers with an influx of patients with pre-existing conditions who must be covered. And Obama will doubtless be shocked, shocked! when that happens.
Brother Bradley J. Fikes, C.O.R. (9eb641) — 5/9/2010 @ 9:39 amWell said, retire05.
GeneralMalaise (294cd8) — 5/9/2010 @ 9:52 amretire05 – Without having looked at the ATT slides, as a corporate manager, I would analyze the total cost of employment – with the insurance benefit and without but paying the fine. Analyzing the scenario of dropping insurance gets complicated by the gauging the reaction of my competitors. Am I going to lose critical employees if I drop the benefit and my competitors don’t or will I have to raise wages to retain certain employees I don’t want to lose to offset the loss of that benefit.
For the employee, with portable health plans and guaranteed insurability, it’s easier to quantify which employer is offering the best employment package. Apart from health insurance, though, there may be other benefits which are not portable that involve vesting periods, which complicate the decision.
daleyrocks (1d0d98) — 5/9/2010 @ 10:04 ami remember being told here months ago, by one of the usual suspects, that this would never happen, and that companies would continue to offer benefits, no matter what the economics.
redc1c4 (fb8750) — 5/9/2010 @ 10:59 amdaleyrocks, do you think that AT&T and Verizon, both union companies who spend billions on health insurance for hourly employees are the only companies facing dramatically increased health care insurance costs? They’re not.
As to “critical” employees, all union members are treated equally, no matter how well, or how badly, they do their jobs. There is no “merit” determination when it comes to the unions.
So if you are a company that is picking up a $30K/yr tab for health care benefits for one employee because that employee has dependents that you also cover, and the fine for not providing health care benefits is $1,200/yr per employee (there is no fine for not covering dependents), which option are you going to take and how much business could you afford to lose when you just saved $28,800/yr per employee?
AT&T sees the handwriting on the wall. Landlines (your hard wired telephone) are rapidly becoming a thing of the past. Cellular services, which include internet, require a lot fewer service techs and can be maintained for a lot less cost. The number of Americans who have hardline phone service is decreasing while the number of Americans who use nothing but a cell phone is increasing. That means fewer service technicians will be required in the future.
And those are jobs that will go away forever.
There is one other option; companies like AT&T will simply hand over the burden of health care insurance to the unions. But then, you will have a lot of people (union bigwigs) who are trying to run a health care insurance plan when they can’t even run a damn union without driving it into the ground.
Either way, Obamacare is going to affect a lot of people who voted for change and are going to get change they never bargained for; not when they agreed to union contracts and not when they elected Obama and the Democrats.
retire05 (2abfb2) — 5/9/2010 @ 11:00 am“daleyrocks, do you think that AT&T and Verizon, both union companies who spend billions on health insurance for hourly employees are the only companies facing dramatically increased health care insurance costs?”
retire05 – No. I did not say that. It is a calculation any corporation offering health benefits to hourly or salaried employees is likely to go through. I was merely amplifying and expanding what you said, but to me the calculation is not as simple as you presented it. Dropping an insurance coverage benefit is the equivalent of a wage cut and there are many steps between completely dropping coverage and 100% employer pay.
daleyrocks (1d0d98) — 5/9/2010 @ 11:44 amdaleyrocks, wages and benefits are not even thought of as the same thing by the unions who negotiate these contracts. Why? Because the unions know that benefits are not taxed, although now the Dems have figured out a way to do that through the “Cadillac” tax, which will, btw, hit most CWA members. If health insurance is ever thought of as a “wage” compensation, it will be subjected to federal income tax.
AT&T retirees currently pick up part of the insurance tab, something they never did before 2009 with the new contract.
And what are companies like AT&T going to tell union workers who are screaming about having to a) pay for their insurance or b)losing it all together? Quit.
As I said; with the new cell technology, and the T-1 technology, those jobs are rapidly going the way of the dinosaur and AT&T will simply unload the dead weight.
retire05 (2abfb2) — 5/9/2010 @ 11:54 am“…The Administration may have its thumb on the insurance companies but it can’t control those Unintended Consequences.”
It works so much better when, instead of a thumb, you use the heel of your boot on their neck!
Unless this is unwound, in ten years there will not be any private medical/health-care insurance (or perhaps even insurance at all) available in America.
AD - RtR/OS! (ae15f0) — 5/9/2010 @ 11:55 amretire05 – My comments are intended to be generic from the perspective of a corporate manager. I said I had not looked at the ATT slides. Take a breath.
“If health insurance is ever thought of as a “wage” compensation, it will be subjected to federal income tax.” If all you have ever known as an employee is 100% company paid benefits I suppose this makes sense. From a management perspective it’s nucking futz.
daleyrocks (1d0d98) — 5/9/2010 @ 12:50 pmAT&T sees the handwriting on the wall.
In the meantime, I recall all the controversy over the past few years about Walmart not providing greater (or any) healthcare benefits to lower-level employees. Ironically enough (or not), a variety of usual suspects on the left snipped about a big American corporation wanting to push its healthcare costs onto the government (and, in turn, the taxpayer—aka, the big sucker).
Beyond Walmart, I believe portions of corporate America in general have been quietly annoyed about the private-sector-oriented nature of healthcare in the US compared with the socialized systems found in other parts of the world. IOW, they’re competing with companies that don’t have to juggle with as much of the headache of finding healthcare for workers. So I imagine at least a certain percentage of CEOs have been secret, cynical bedfellows of ObamaCare. They’d love to make Uncle Sam pick up the tab for part of their bottom line.
This is where politics can become very squishy (eg, RINOs like Ah-nold Schwarzenegger, or Massachusett’s former governor Mitt Romney) and full of hypocrisy (“Walmart needs to pay for its workers’ healthcare!! America also needs a system where we the happy-face taxpayer supports everyone’s healthcare!!!”).
Mark (411533) — 5/9/2010 @ 12:52 pm“So I imagine at least a certain percentage of CEOs have been secret, cynical bedfellows of ObamaCare.”
Mark – I’m not sure I buy this argument and I can see where retire05 might be getting a little fired up. I look at my bottom line take home pay because that’s what I have available to pay my mortgage, car loans, utilities, buy food with, etc. If that take home pay is after the deduction of a partially paid employer insurance plan or wholly paid employer insurance plan, great. Now going forward if my employer says they are dumping the insurance plan and I have to buy it myself, I all of a sudden have a lot less money available to pay all those bills I described above. A rational person might view that as a reduction in their take home pay and be pissed off at their employer, demanding an offset for the reduced benefit.
daleyrocks (1d0d98) — 5/9/2010 @ 1:20 pmMost of the opthamologists I know have their own surgical suites, too, and several physicians have their own office buildings. At one point I think the reform bill was going to ban doctors from practicing/using their own buildings. If so, did that make it into law?
Comment by DRJ — 5/9/2010 @ 9:34 am
Stark case. Rule against self-referral. Been around for a while.
As a business plan, you want to isolate and insulate your enterprises. Not if you’re a doctor. It makes more sense, most of the time, to contract out to an entity you have no investment in.
nk (db4a41) — 5/9/2010 @ 1:28 pmThe rule against self-referral goes beyond medicine, BTW. It got my former Congressman, Dan Rostenkowki, sent to prison, because he got the taxpayers to pay rent for a building he owned but claimed he was renting for his local office.
nk (db4a41) — 5/9/2010 @ 1:40 pmnk,
Great idea but it doesn’t work like that in small towns that are outside major metropolitan areas. There is just one major eye surgery center in each the larger towns in my area, and none in the smaller towns. If everyone referred patients to other facilities, we’d all have to drive 40-100 miles instead of 5-20. They built these facilities because there weren’t any others there, and no one wanted to build them except the doctors doing the procedures.
FWIW, that’s also the way laproscopic procedures became available in my area many years ago. A surgeon learned the procedure and built a facility to do it in, because at the time the area hospitals weren’t receptive to same-day surgical procedures.
DRJ (d43dcd) — 5/9/2010 @ 2:08 pmdaleyrocks, I suggest you look into the history of “wage” compensations and learn why additional “benefits”, like health care, are not taxed.
They are not taxed because the government, not the companies, ruled it that way. To the companies, benefits, at least those set in stone through contracts, ARE part of the cost (hourly wage plus benefits) of an employee.
That has now all changed. And someone is going to pay the “surcharge” on Cadillac plans. It ain’t gonna be AT&T, you can bet on that.
If plans over a certain limit, I think $27K are to be subjected to “surcharges” how do you think the IRS will know how much the health care insurance received by an employee is worth? Simple, the companies will have to provide that information to you, and you will have to provide it to the IRS, just as you will have to provide to the IRS proof that you have insurance to avoid being fined. That means that companies, like AT&T, will have to let an employee know how much their individual plans are worth, with a worker who is single and has no dependents having a plan that is valued less than a worker with a spouse and three kids.
Middle America is going to get screwed no matter how the Dems spin it.
retire05 (2abfb2) — 5/9/2010 @ 2:24 pmdetire05 – I am aware of the history of health insurance in this country, thanks. I’m confused, though, are you suggesting that employees cannot put a monetary value on a benefit such as health insurance, especially if their employer is threatening to take it away? That is all I am suggesting. At my prior employer we made sure employees received an individualized brochure each year detailing the cost to the company of their individual benefits. With respect to health insurance, the more you made, the more you contributed to the overall plan cost.
daleyrocks (1d0d98) — 5/9/2010 @ 2:31 pm– Obama announced a $5B program to cover retiree medical premiums of companies agree to temporarily (through the 2012 elections?) keep them on the company plans.
– If a doctor didn’t own the “hospital” before 12/31/09, he is prohibited from starting one is how I recall the wording of the bill.
– More than one plan covering union workers will be subject to the penalty – hence the Obama administration push to exempt union members from the penalty until something like 2018.
Nice to contemplate a future where we go from a comfortable life to one where we have to choose between food and health care premiums, where electricity and natural gas costs will “necessarily skyrocket”, gasoline with be pegged at something over $5/gallon, etc. Thank God we have progressives engineering a more socially just future for us all.
in_awe (44fed5) — 5/10/2010 @ 9:01 am