Side Effects: New Entitlement Compounds Debt Problems of Existing Entitlement

Kathryn Nix / April 07, 2010

Obamacare was sold as a way to improve benefits and expand coverage.  But it doesn’t seem to be panning out that way.

Almost immediately, major companies offering excellent health coverage to both active workers and retirees said the new law would cost them a bundle.  AT&T alone said they’d have to set aside an extra $1 billion in the first quarter due to an Obamacare tax on their retiree drug coverage.

Now, both retirees and current employees of AT&T and other affected companies are “wondering whether the new law could mean reduced or canceled benefits for them in the future,” reports Byron York of the Washington Examiner.

Obamacare devotees have described the tax on retiree drug benefits as a move to close a “loophole.”  The government, they said, was actually subsidizing the company-paid benefits, so the tax is merely a way to recoup some of the government’s money. Sounds reasonable.  Until you get the back story and the details. (more…)