Tuesday, April 6, 2010

Impact of ObamaCare

A friend of mine runs a local company and made some comments yesterday regarding ObamaCare that I thought interesting.

They are taking an immediate write-off of about $90 million due to the loss of deductibility of retiree health benefits. This comes right off their bottom line and will impact their ability to hire new employees and increase the costs of their products.

They estimate that if they continue with their current level of health benefits that their annual costs will increase by a minimum of 11% or $25 million per year. One really big unknown, and that is not included in the $25 million, is how the elimination of lifetime limits will impact them. Genomics and other massively expensive new procedures and tests could bankrupt them without some form of cap on lifetime expenditures. A cap that under ObamaCare will now be illegal. According to ObamaCare, if you provide health benefits to your employees, it’s all or nothing. A completely open-ended, unlimited expense is impossible for any company.

Within the next year they will need to make a decision about any continued health benefits. Though he didn’t say it, the implied message is that it would be financially irresponsible to continue providing any health benefits after ObamaCare is implemented. Doing so would put the company itself at risk of bankruptcy. Their only choice will be to discontinue all healthcare benefits and have employees obtain healthcare from the government.


Government Healthcare – British Style

He grew up in Britain and provided some insight on the British system that the Democrats want to convert us to. Britain had no real medical system prior to the late 1940’s. Before then extremely few people in Britain, likely less than 5%, EVER saw or talked to a doctor or any other medical person. Without the free enterprise system that the U.S. has Britons tended to wait on the government to do something rather than do it themselves. For Brits the introduction of a government healthcare system in 1948 was a huge improvement over what they didn’t have prior and, without knowing a comparative system, still consider pretty good.

Contrast this with our current healthcare system in the U.S. that is the envy of the entire world. Many Brits come to the U.S. every year for healthcare. I don’t hear of any U.S. folk going to Britain for their better healthcare.

British doctors are paid £60,000 per year (about $100,000) by the NHS (National Health Service). This, they have found, is not enough to encourage people to go through medical school. Due to a shortage of medical students Britain has been importing doctors from India, Morocco, and other countries. The NHS is under serious financial strain and cannot afford to increase pay to doctors so the government are considering other options such as a much shortened medical school regimen that will produce something akin to a jr. doctor who would receive pay of about £50,000 per year.

For most Britons, if they want to see a doctor, they must call their local NHS first thing in the morning and hope to get an appointment that day. If they can’t get one that day then they wait and call again the next morning.

2 comments:

cholla45 said...

Dear Crusty,
You need to clear away some of the crust and read what's actually in the bill. On the costs to businesses, read this, it's got the true story:
http://www.stltoday.com/stltoday/news/stories.nsf/editorialcommentary/story/C580263F3E01ED1C862576FC008005C5?OpenDocument
Then go read the rest of the bill before you spout any more nonsense.

It's all well and good to object to the bill, but you should object to what's actually in it, not to stuff you make up (or let others make up for you, which is more likely.)

Any smart business owner realizes the bill will actually help companies continue to provide healthcare benefits to his employees.

Crusty said...

The article you referenced appears accurate as to the accounting specifics. It leaves out one very key point though: Congress wanted (and needed) private businesses to continue providing drug benefits to their retiree population. It would have cost approximately 6 times as much for the government to provide the benefit to these retirees than it cost to incent the businesses to provide it.

If Congress had not provided the incentive then private businesses would have ended the drug coverage they provided which would have quickly bankrupted medicare.

Numerous businesses as well as groups such as Hewitt Assoc have reviewed the legislation in detail and determined that it will increase their costs. I'm not aware of any who have found that the bill will help them in any way.