01 May 2010 After ObamaCare, The Deluge, by Matt Patterson
Some disasters strike suddenly, wrecking havoc in the dead of night: lightning, tornadoes, earthquakes. Others, a hurricane, for example, can be seen coming far in advance. Meteorologists can warn about such a storm, but that is no guarantee that 1) anyone will listen, or 2) that even if warnings are heeded there is much that can be done to lessen the damage.
ObamaCare is such a storm. Some have been warning for a year now about the destruction such legislation would visit on our economy. Experts warned especially that ObamaCare would impose taxes and regulations on American business that would kill jobs and drive up insurance premiums.
Now ObamaCare is law. The storm has come ashore. And we are seeing the first signs that our economic levees will not hold, that the disasters predicted are coming to pass.
Verizon, the second largest phone company in the United States, estimates that ObamaCare will impose on them $970 million in additional costs.1 What will this mean for Verizon’s 223,000 workers?2 According to wireless analyst Chetan Sharma, “This is having an impact on the bottom line and that can cut jobs.”3 No kidding.
Verizon is not alone – AT&T, the largest U.S. phone company, employing 281,000 workers,4declared its expectation of $1 billion in health care related cost thanks to the new bill.5 That’s one billion, with a ‘b.’ Very few companies can take that kind of hit and not shed workers or raise prices. ObamaCare bodes ill for employee benefits as well, as the company explained: “As a result of this legislation, including the additional tax burden, AT&T will be evaluating prospective changes to the active and retiree health-care benefits offered by the company.”6
Other companies, including Caterpillar, AK Steel Holding7 and John Deere8 have issued similar dire cost warnings. All in all, analysts estimate that costs associated with ObamaCare could wipe out $14 billion from U.S. corporate coffers,9 a devastating collective hit for companies struggling in a still-weak economy. As sure as the Sun will rise, workers and consumers will pay the price in the end.
And get ready for higher health insurance premiums. According to an analysis of ObamaCare conducted for – and reported by – the Associated Press, “premiums for young adults seeking coverage on the individual market would likely climb by 17 percent on average,”10 thanks to the new law. The AP story highlights a 24 year old part-time teacher from Chicago who now pays $140 a month for health insurance, but who under the new law “could expect to pay $300 to $500 a year more.”11 Ouch. That’s a huge expense for a young person recently out of college who’s trying to a get a foothold in the workforce.
How very nice of the AP to release these findings after ObamaCare passed. But of course, one didn’t need an AP study to know that ObamaCare would drive up premiums. States which instituted their own versions of ObamaCare in recent years, Kentucky and Washington State among them, saw their health insurance premiums skyrocket as a result of “reform.”12 One would think that the federal government would be capable of examining and learning from failed experiments at the state level (indeed, that’s one of the great benefits of a federal system), but apparently that is too much to ask of our current government, which has consistently placed idealism over empiricism.
Hurricane ObamaCare has at last come ashore, a Category 5 storm that will drown the American economy in a flood of taxes, unemployment and debt.
We can’t say we weren’t warned.
Matt Patterson is a policy analyst for the National Center for Public Policy Research and a National Review Institute Washington fellow.
1 Amy Thomson and Olga Kharif, “Verizon Joins AT&T, Deere in Booking Costs From Health-Care Law,” Businessweek, April 2, 2010, downloaded from http://www.businessweek.com/news/2010-04-02/verizon-joins-at-t-deere-in-booking-costs-from-health-care-law.html on April 2, 2010.
4 Amy Thomson and Ian King, “AT&T to Book $1 Billion Cost on Health-Care Reform,” Businessweek, March 26, 2010, downloaded from http://www.businessweek.com/news/2010-03-26/at-t-to-take-1-billion-charge-on-health-care-reform-update1-.html on April 2, 2010.
8 Darryl R. Isherwood, “Deere Expects $150 Million Hit From Health-Care Reform,” Fox Business, March 25, 2010, downloaded from http://www.foxbusiness.com/story/markets/industries/industrials/john-deere-expects–million-hit-healthcare-reform/ on April 2, 2010.
9 Amy Thomson and Ian King, “AT&T to Book $1 Billion Cost on Health-Care Reform,” Businessweek, March 26, 2010, downloaded from http://www.businessweek.com/news/2010-03-26/at-t-to-take-1-billion-charge-on-health-care-reform-update1-.html on April 2, 2010.
10 Carla K. Johnson, “Health premiums could rise 17 pct for young adults,” Associated Press, March 31, 2010, downloaded from http://www.google.com/hostednews/ap/article/ALeqM5hLAMW_KTqY_JVMQF-gNn3O0_uUcQD9EOIBQO0 on April 2, 2010.
12 Matt Patterson, “No Free Lunch: The True Cost of ObamaCare,” National Center For Public Policy Research, October, 2009, downloaded from http://www.nationalcenter.org/NPA590.html on April 2, 2010.