Documents Show Companies See Incentive in Dropping Health Coverage

Employers, unions warned months earlier that health bill would trigger losses.

WASHINGTON – U.S. Rep. Joe Barton, R-Texas, ranking member on the House Energy and Commerce Committee, today released a staff memo that indicates four large employers under investigation by committee Democrats see incentives in dropping employer health care coverage thanks to the new health care law.

“Turns out ObamaCare means if you like your health plan you can lose it. The president didn’t have to actually strong-arm companies into dumping their employee health insurance because his bill carried financial incentives to virtually guarantee that result,” Barton said. “But something’s very wrong when, like AT&T found out, paying $600 million in penalties will allow you to stop paying $2.4 billion for insurance, leaving both workers and taxpayers stuck. I suppose we can’t know for some years how many thousands, hundreds of thousands or even millions of workers will lose their company insurance because of health care reform, but I know that it will be a breach of faith for most of them and a tragedy for some.”

The preliminary investigation by the Republican staff indicates:

1. “Each of the large employers under investigation warned that health care legislation would trigger reporting requirements (of pending losses) months before passage of the health care law.

2. “Internal company documents from each large employer under investigation reflect concerns over the health care legislation’s new taxes and effect on costs.

3. “Internal company documents indicate that there will be an incentive to drop employer health care coverage because the cost of providing coverage will be much larger than the penalty imposed by the health care legislation.”

For example, a presentation provided to investigators by AT&T shows that the company could save $1.8 billion annually by dropping coverage for current employees and paying the penalty imposed in the law.

A copy of the Republican staff memo can be found here.

Please note: We have redacted information in these updated files.

The documents from AT&T can be found here.

The documents from Caterpillar can be found here and here.

The documents from John Deere & Company can be found here.

The documents from Verizon can be found here.

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