nos-trum. pronunciation: \nos'-trum\. noun. Etymology: Latin, neuter of noster our, ours.
1. a medicine of secret composition recommended by its preparer but usually without scientific proof of its effectiveness.
2. a usually questionable remedy or scheme.
See here for more discussion.

Thursday, April 1, 2010

UPDATE #2 On Poison Pill #4 in HC Law

Additional employers post losses due to termination of the tax deduction for providing retirees with drug coverage.

Recall that Congress originally granted this tax deduction to companies in order to encourage them to keep retirees on coverage.

Also, recall that it costs the taxpayer about $600 (in lost tax revenue) for a company to keep paying for part of drug coverage to retirees.  If companies decide the coverage now costs too much, they will transfer cost to the retiree--through higher co-pays, higher premiums, or caps on coverage.

Alternatively, as (then) Congress feared, they may cancel it altogether.  If they cancel, the taxpayers cost will rise to $1200 per person on Medicare.

Our Congress really knows how to bring down the cost curve, don't they ? (do I have to spell out the sarcasm?).  We taxpayers potentially could pay $1200 instead of $600.  Where do I go to sign up for that deal?

Here are the new companies and the amounts they are required to report as charges:

Boeing                       $150 million
AT&T                       $1 billion
Lockheed Martin       $96 million
Ingersoll-Rand           $41 million
Goodrich                   $10 million

There are about 3500 other companies who will be impacted by this charge, and will by law have to report the loss this year.  When a company earns less, investors lose and will not invest, companies don't grow, and new jobs are not created.  Isn't that just common sense?

It makes even less sense when 16 million are underemployed or unemployed.  But I guess you have to go to Harvard to miss all that.

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