Tuesday, October 19, 2010

About that cost curve Pt. III


If we're beginning to sound like a broken record around here, don't blame us... just meet us at the polls on November 2nd.

WASHINGTON – Aerospace giant Boeing is joining the list of companies that say the new health care law could have a potential downside for their workers.

In a letter mailed to employees late last week, the company cited the overhaul as part of the reason it is asking some 90,000 nonunion workers to pay significantly more for their health plan next year. A copy of the letter was obtained Monday by The Associated Press.

"The newly enacted health care reform legislation, while intended to expand access to care for millions of uninsured Americans, is also adding cost pressure as requirements of the new law are phased in over the next several years," wrote Rick Stephens, Boeing's senior vice president for human resources.

Boeing is the latest major employer to signal a shift for its workers as a result of the legislation, which expands coverage to more than 30 million uninsured people and ranks as President Barack Obama's top domestic achievement. Earlier, McDonald's had raised questions about whether a limited benefit plan that serves some 30,000 of its employees would remain viable under the law. That prompted the administration to issue McDonald's a waiver from certain requirements under the law.


Those last two sentences are somewhat of a non-sequitur as the article does not suggest that Boeing will lobby-up as McDonald's did and ask for an exemption. Unless the non-union employees the article is referring to are on low cost/low benefit plans provided via Boeing and Boeing will indeed be going hat in hand and with an open check book to the White House to request their own little carve-out.

How dare we suggest anything untoward with respect to the administering of ObamaCare, you say.

This byzantine 2,800 page monstrosity what with its scads of ambiguous "to be left to the discretion of the Secretary (of Health and Human Services)" directives is a lobbyist's dream. So in the spirit of the current smear campaign against the Chamber of Commerce, prove that there was not some greasing of the skids that went down with the McDonald's carve-out.


Spokeswoman Karen Forte said the Boeing plan is more generous than what its closest competitors offer, and the company was concerned it would get hit with a new tax under the law.

The tax on so-called "Cadillac" health plans doesn't take effect until 2018, but employers are already beginning to assess their exposure because it is hefty: at 40 percent of the value above $10,200 for individual coverage and $27,500 for a family plan.

"We want to manage our costs so this tax doesn't apply to our plan, but that's down the road," said Forte. "If this health care law hadn't passed, would we be making changes to the health care benefit? Absolutely. For competitive reasons."

In the letter to Boeing employees, Stephens said out-of-control health care inflation is hampering Boeing's ability to compete with other manufacturers. Its major civilian aviation competitor, Airbus, is based in Europe, where governments shoulder the burden of health care costs.

This helps explain what will be happening to the union workers alluded to at the top of the article: their time is coming.

And please note what Forte said about "managing" the costs so that the tax doesn't apply to the current Cadillac health plans. If you were to suppose that those union workers would be "managed" from their Caddy and into a Chevy, you move yourself to the head of the class. How else is Boeing going to avoid that 40% whopper without slashing benefits?

Finally, it's also important to note what Stephens says about out-of-control health care inflation and Forte saying they would be making these changes even without the dawning of ObamaCare in America.

The take-away is that ObamaCare has done nothing to address this inflation... nothing whatsoever... and has only exacerbated the situation by mandating additional benefits that must be taken out of the hide of the consumers in the form of higher premiums.

ObamaCare: doing absolutely nothing to solve current problems while creating a myriad of new ones for the future.

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