Waxman Gets Waxed

Remember when Henry Waxman ordered AT&T, Verizon, Deere and Caterpillar to submit any and all interal company documentation to Congress regarding health care because someone caught wind of a memo about the bill's effect on retirement drug benefits?  Well, the companies submitted their documentation and instead of hailing them into Washington for hearings, Waxman ended up quietly dismissing the matter as the documentation showed that many large companies were weighing the option of dumping their employees' health care coverage in exchange for paying penalty fees to the government. Specifically,

AT&T produced a slide entitled "Medical Cost Versus No Coverage Penalty." A document prepared for Verizon by consulting firm Hewitt Resources stated, "Even though the proposed assessments [on companies that do not provide health care] are material, they are modest when compared to the average cost of health care," and that to avoid costs and regulations, "employers may consider exiting the health care market and send employees to the Exchanges."

A Deere labor relations officer sent in an email stating that the company should consider alternatives to providing health benefits, which "would amount to denying coverage and just paying the penalty." Caterpillar felt it would have to give "serious consideration" to the penalty option also. Their documentation also predicted certain increases as a direct result of the bill which made the penalty option even more attractive. Deere said, "We do expect double digit health care increases as most Americans will now have insurance and providers try to absorb the 15% uninsured into a practice." Both Caterpillar (CAT, Fortune 500) and Verizon stated that allowing dependents to remain on their parents' policies until age 26 would add expenses of $20 million a year.