Health Care time bombs

Now another provision is blowing up in the Democrats' faces: a tax change that exposes companies such as Caterpillar, John Deere, and Verizon to hundreds of millions of dollars in new costs and may lead some of them to drop prescription-drug coverage for retirees.  

The provision did not attract much attention during the larger debate over the health-care bill, but now corporate memos are starting to leak in which employees are told to expect changes to their health-care plans as a result of the legislation. The tax change affects a subsidy that was designed to help employers continue offering prescription-drug plans for retirees instead of dumping them into Medicare Part D. The Democrats' health-care bill would make the subsidy "less valuable to employers, like Verizon" - according to an internal Verizon memo obtained by National Review Online - "and as a result, may have significant implications for both retirees and employers." In other words, Verizon and other employers will probably drop their retiree prescription-drug coverage. After all, why pay for something if the government is offering to pick up the tab?

If we do see a large number of employers eliminate prescription-drug coverage from their retiree benefit packages, it will mean two things. First, it will illustrate once again the emptiness of Barack Obama's promise that if you like your health-care plan, you can keep it. Retirees whose companies cut their prescription-drug plans will have to switch to Medicare Part D. According to a study put out by the American Benefits Council, "Employer plans generally provide much better protection than the standard Medicare PDP benefit, but these employers are likely to drop their plans in favor of commercial PDP plans because of the new law's impact on earnings."