Obama Lied: You May NOT be Able to Keep the Med Insurance You Have. \

Posted on March 18, 2010


Here are two articles that let you know that ALL business health care packages will be affected by health care reform legislation if passed. Remember: your employer chooses your coverage:

First is a corporate view from Pfizer, the largest research pharmaceutical company; the other the view of the Small Business Council. In both instances, short of layoffs, retirees would be the hardest hit by both caps on benefits and the new law cutting medicare benefits.

1. Corporate Retirees: bitter pill for Pfizer retirees

By David Collins

Publication: The Day

Published 09/18/2009 12:00 AM
Updated 09/18/2009 08:35 AM

Those of you who are content with your existing medical coverage, in the midst of this national debate on reforming the health care system, might find that the changes in health benefits in store for Pfizer retirees could push you a little out of your comfort zone.

It’s almost hard to remember the stable Pfizer of old, the benevolent employer that cosseted its stable work force with generous benefits, from the day of hire right through a comfortable retirement.

The company even prided itself at one time in having never laid off a single employee.

At the conglomerated Pfizer of today, where paranoid employees are ever watchful for the next reorganization and layoff roulette, the health benefits package, at least for future retirees, is now waning, too.

It seems especially ominous, for the rest of us, when health care companies, in the name of necessary cost cutting, start limiting health care benefits.

Pfizer says its new health care plan for retirees, with its Orwellian moniker, Total Rewards, was conceived as a way to streamline the various “legacy” plans covering employees who came from the various companies that have been merged into the new Pfizer.

“The sole motivation was to harmonize a number of legacy benefits into a single benefit plan, making it simpler for retirees to make choices,” said Joan Campion, Pfizer spokeswoman, when I called to ask about the changes.

The changes, she added, will also lower Pfizer’s cost of covering retirees, meaning, I guess, that it’s as much about rewarding the company as it is the retirees.

Total Rewards determines a set amount of money, based on years of service, that will be spent on health coverage for each retiree. Called the Retiree Medical Subsidy, it will set a final cap on the total amount to be spent on health care premiums and prescription drug coverage.

If you outlive your RMS, as its known, you’re out of luck.

In fact, the brochure produced to explain the system to retirees envisions just such a scenario.

Mary, the hypothetical Pfizer employee in the brochure example, retires from Pfizer after 20 years of service, with an RMS of $220,000. The annual cost of coverage for Mary and her spouse is hefty in the five years before she is eligible for Medicare, and by the time she is 64 it is costing her $8,118 a year and Pfizer, paying from her RMS, is contributing another $13,500.

By the time she is 80, Mary’s RMS is depleted and she then, the brochure blithely reports, “is responsible for the full cost for her coverage.”

That coverage will then cost her $24,000 a year, based on the hypothetical scenario.

The Pfizer employee who complained anonymously to The Day about the health care changes suggested in an unsigned letter that the company may simply be trying to push more people into retirement now – the new system applies to those who retire after Jan. 1 – so there will be fewer people to lay off when the Wyeth merger is finished.

I don’t know whether there is any truth to that.

But I do think the changes at Pfizer are another sign that people who may feel content with their existing health care coverage should consider the cost increases and benefit reductions that surely lie ahead, in the event nothing else is done.

This is the opinion of David Collins.

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Small business has long been attributed with being an engine driving new employment.  But the Small Business Administration has come out with a warning that with costs already intolerable, health care reform legislation would not only mean layoffs and possible closure due to requirements under the law but will harm the private health insurance companies forcing many out of business:

2. SMALL BUSINESS:  BCA urges Congressional representatives to consider detrimental impact of health care reform bill [medical-news.net]

18. March 2010 02:20

The Small Business Council of America (SBCA) urges Members of the House of Representatives to vote against the Senate health care reform bill.  The SBCA believes the details of this legislation will not only harm small businesses and their ability to provide health care to their employees, but that it could lead to the ultimate demise of this country’s private health care system. As discussed below, the SBCA supports health care reform, but not as proposed in the House and Senate bills.

“We are opposed to new government mandates on individuals, employers and states, increased federal spending, and the establishment of yet another entitlement at a time when we cannot properly fund existing entitlement programs,” said Ron Waldheger, SBCA Vice President – Health Care Legislation and Cleveland health care attorney.

According to Peter Shanley, SBCA CEO and Wilmington, DE tax and health care lawyer, “If health care is not funded properly through Medicare then the end result will be greater rationing of our health care system and fewer, more costly options for Medicare recipients.  The quality and availability of health care will go down and Medicare patients will be hurt in the long run.”

Due to the current lack of proper funding of Medicare, the lack of their bargaining power, and lack of large risk pools, small businesses, states (for Medicaid) and individuals already indirectly pay for the lion’s share of the shortfall by paying higher premiums. In fact, many small businesses can only offer so-called “Cadillac” plans because of the exorbitant premiums charged to small businesses.

Further, the excise tax on such “Cadillac” plans includes the costs of other benefits, such as flexible spending accounts, dental and vision coverage. The new government mandate that small businesses now have to capture the costs of all the benefits in order to comply with the excise tax, makes it that much more likely they will decide to simply stop offering such benefits. The proclamation that “people can keep the insurance they currently have” will become a falsehood, simply because it is not up to the individual to decide what insurance they have, but their employer.  The bill House Members are being asked to support, along with a “fixer” bill, will take that option away from millions of Americans.

The currently proposed House and Senate legislation will exacerbate the costs shifted to and paid by small business, the bulk of whose employees are below Medicare age and not eligible for Medicaid. Many physicians will not see Medicaid patients because the reimbursement is so low.  Yet the Senate bill would add another 18 million people to Medicaid.  Who will treat them? Who will pay for their treatment? We are concerned that the expansion of coverage and reduction of funding will mean even more cost shifting to small business by private insurance, driving up their health care costs even more.

SBCA is very supportive of the need to transform our health care system and believes there are currently several well-vetted proposals that could be put together which would “fix” the small business problem without subjecting small businesses to increased taxes and new mandates.  Senators Kerry, Lincoln, Durbin, Snowe and Lieberman (among others) have all come up with detailed health care proposals that would create larger risk pools (essential for small business insurance coverage), deal with the pre-existing condition problem, ensure portability, establish some mechanism to take care of catastrophic health care cases and provide for the deductibility of health care premiums for all small businesses and individuals.  Tax credits could be provided to small employers who cover their employees, rather than hitting them with higher taxes and new mandates as the proposed law would do.

We urge our Congressional representatives to consider the detrimental impact this bill will have on their small business constituents, their employees and their families and vote against it.  We believe it is important to slow down this entire process, subject it to debate and allow the public to have several weeks to carefully examine the final health care reform bill.

SOURCE Small Business Council of America

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