The big business pushback against health reform
By Suzy Khimm
Hi, everyone. I’m Suzy Khimm, and I write about national politics for the Washington bureau of Mother Jones. I was previously at The New Republic, where I helped cover the health-reform debate, and I'm also on Twitter. While Ezra’s on vacation, I’ll be focusing on what health reform means moving forward, both in terms of politics and policy in light of the battles already underway.
Though the Republicans' effort to overturn the Affordable Care Act seems to be losing steam, another kind of repeal movement is just starting to gain momentum. The latest protestations aren’t focused on repealing the entire health law — a proposition that had dim chances of success from the get-go. Rather, certain industry lobbies and interest groups are starting to attack specific parts of the health law that they’d like to see repealed or rolled back. And among the newest critics is an association of large corporations unhappy with a provision that eliminates a special tax break that helped businesses pay for their retiree prescription drug coverage.
What’s the thrust of their objection? Under Medicare Part D, the government gave companies a 28 percent, tax-free subsidy to pay for their retirees’ drug plan, but also let companies deduct the amount from their income taxes. The health law continues the tax-free subsidy but eliminates companies’ ability to deduct it from their taxes in 2013. The changes prompted some companies to draw attention to the charges: AT&T recently reported that the accounting charge would cost them $1 billion, Caterpillar reported $100 million, and other corporate giants have made similar announcements.
White House adviser Valerie Jarrett insists that AT&T, Caterpillar and other companies aren’t part of “an orchestrated effort” to overturn the provision — she says they’re simply following the law by reporting the accounting charge. But the American Benefits Council, which counts AT&T among its 300 members, has made a vocal push for its repeal, calling the measure “a serious mistake that is having negative and unintended consequences” during a time of economic strain.
And the White House itself has begun to hit back more aggressively. In today’s Wall Street Journal, Commerce Secretary Gary Locke defends the health law as “pro-business,” citing the other parts of the law that will be a boon to big companies — by reducing premiums and costs to employers — and dismissing the objections as a one-time charge that’s dwarfed by the larger benefits.
The accounting charge controversy is just the latest sign that lobbying over health reform hasn’t stopped with the passage of the bill. There are measures that, seen in isolation, aren’t necessarily a popular sell, either to specific interest groups or the public at large, making it easy to raise a hue and cry. And I’d expect more and more conservatives to embrace this kind of “selective repeal” as they realize that they can only go so far with a total repeal campaign that even some Republicans have described as more symbolic than realistic.
But the fact is that the Affordable Care Act is meant to work as a whole, and stripping away select provisions stands to upset the balance. The accounting charge, for example, will generate some $4.5 billion to $5 billion in revenue — about the amount that the government is investing in reinsurance programs for early retirees, which will lower premiums as a boon to both employers and employees. These kind of trade-offs are fundamental to making the law work and deliver the kind of benefits that reform advocates have promised. And big businesses themselves have recognized the need for this trade-off as well, despite some of the hits they may take in the process.
It’s the reason the Business Roundtable swung in support of health reform. And it’s why companies such as G.E., Credit Suisse and Morgan Stanley haven’t joined the American Benefits Council’s pushback, shrugging their shoulders at the health law’s accounting charge in light of ways they believe they’ll stand to gain.
-- Suzy Khimm is a journalist who covered health-care reform at The New Republic and is now a political reporter at Mother Jones.
Washington Post Editors
April 1, 2010; 1:25 PM ET
Categories: Health , Health Coverage , Health Economics , Health Reform
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