Early Warning Signs

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Fortune magazine has a blockbuster report out this week that shows major companies are beginning to recognize the extraordinary risk of continuing to provide health benefits for their workers under ObamaCare.

It reports that “many companies are examining a course that was heretofore unthinkable, dumping the health care coverage they provide to their workers in exchange for paying penalty fees to the government.”


If this happens — and there is every incentive for companies to do this — the costs of the health overhaul law would skyrocket, and tens of millions of Americans would lose their job-based plans and be forced to get coverage in the publicly operated state exchanges due to begin in 2014. This will send fear into the hearts of working Americans who have been promised over and over that if they like their current coverage, they can keep their insurance.

Stability may not be an option. The risks to the companies of the fines, penalties, mandates, and exposure to risk under ObamaCare are just too great.

The companies’ revelations came as a by-product of an ill-fated demand from Energy and Commerce Chairman Henry Waxman, who was furious at them for having the audacity to follow SEC rules and report the earnings losses they would suffer as a result of just one provision of ObamaCare (the loss of part of a tax break for providing retiree health benefits).

Rep. Waxman demanded every document from the four companies he subpoenaed that discussed what the bill would do to their health costs. He got 1,100 pages and quickly cancelled the hearing where the companies were slated to testify. Clearly Democrats did not want the full story to come out.

But now it has. The documents show the companies analyzed the impact of the law on their businesses — as any responsible company must do — and the conclusions are undeniable: It would be a lot cheaper to pay the fines for not providing coverage than to continue to provide health insurance, especially the ultra-expensive plans that will be required under the law.

“AT&T revealed that it spends $2.4 billion a year on coverage for its almost 300,000 active employees, a number that would fall to $600 million if AT&T stopped providing health care coverage and paid the penalty option instead,” Fortune reported.

This process has done a great service to the country. These reports are the canary in the coal mine warning politicians, businesses, and consumers of the huge risk and upheaval that will be created by ObamaCare. No one can afford this new law, especially taxpayers who will foot a much bigger bill for coverage if companies opt out.

And if Republicans should take control of one or both houses of Congress this November, I have a bridge to sell to anyone who expects them to increase the mandate penalty to equal the cost of coverage. It won’t happen. This law must be changed.

Why ObamaCare is failing: Speaking of opting out, 19 states decided to let the Feds come in to run the new health risk pools I wrote about in my Wall Street Journal piece last week. And now we learn that 41 states have filed various challenges against ObamaCare. They simply are not going to stand for being treated like contractors and tax collectors for the federal government to implement a law that most say they cannot afford and that many say will subject their residents to unconstitutional mandates.

My husband and I had the privilege of attending the AEI Annual Dinner last evening and Gen. David Petraeus was the keynote speaker. What an elegant and beautifully organized speech he gave that has relevance for the health debate as well as the restructuring of the Army under his command.

Here’s the essence of his speech (which, to his credit, I remember without taking a note):

1) Start with a Big Idea and get the idea right;

2) Communicate the plan up and down and across, but mostly down so those required to participate understand it;

3) Implement the plan carefully and with attention to the vision as well as detail;

4) Learn from the process to inject these lessons into the next phase of the operation.

ObamaCare doesn’t meet Petraeus’ test: The Big Idea was wrong because it made far too many changes with a careless disregard for the unintended consequences (see above). On communication, the White House and congressional leaders failed because they are ignoring how smart the American people are in actually understanding this unpopular plan. Implementation is getting more difficult by the day, both because it is such a poorly written bill and because those in charge of implementation, including states and businesses, are balking. And we have yet to see if they learn any lessons from this fiasco.

Obama’s fiery rhetoric: Columnist Mort Kondracke has a very insightful piece in today’s CQ Politics. He examines the dichotomy between President Obama’s fiery and at times reckless rhetoric blasting business and industry, right after he sidles up to them when he needs their help in passing his legislative agenda. “You almost suspect that the administration and its leader are bipolar,” Kondracke writes.

After wooing and cajoling health sector companies to support his health overhaul plan, even convincing them to spend hundreds of millions of dollars on ads to promote it, he and his aides now are on the attack. HHS Secretary Sebelius said she expects to be in “hand-to-hand combat” with the insurance companies as she tries to rule how they operate.

In one moment, Obama criticizes the “vilification and over-the-top rhetoric [that] closes the door to the possibility of compromise,” and in the next, he and his staff make unfounded and inflammatory accusations against business, scoring political points while denying facts.

Kondracke concludes that Obama is “a liberal without the slightest idea of how private enterprises create wealth — and [is] deeply suspicious of their practitioners.” I believe that is right. Obama simply has no idea of the risk, the incredibly hard work, and the forces of competition that create the genius of the marketplace.

“But he knows that unifying rhetoric is what the country wants to hear. So, one day it’s one thing. Another day, it’s another. If this is right, it won’t stop and it’s very sad.”

Sadly true.

Crazy, immoral US health care: Don’t miss our Clip of the Week today. The physician tapped to run the Centers for Medicare and Medicaid Services, Dr. Donald Berwick, gives a big wet kiss to the British National Health Service. “I am a romantic about the NHS; I love it,” he says. “All I need to do to rediscover the romance is to look at the health care of my own country,” which he calls “crazy” and “immoral.”

A hat tip to Bob Goldberg of the Center for Medicine in the Public Interest for his article in The American Spectator about Berwick’s 2008 speech on the 60th anniversary of the NHS.

Berwick has a reputation as a man strongly committed to coordinated care and delivery system reform. But he will fit right in to an administration that is hostile to the marketplace.

He talks of the “darkness of private enterprise,” his distrust of market forces, the importance of redistribution, and the inestimable value of placing “politicians between the people served and the people serving them.” And yet he implores the NHS to “put the patient at the center for everything that you do.” How would that work, exactly?

We are in big trouble as Dr. Berwick will be in charge of administering big chunks of ObamaCare. Some of these quotes might be useful to bring up during his confirmation hearings.

Grace-Marie Turner is with the Galen Institute in Washington DC