obamacare costs business profits – already

While our dear comrade leader and the democrats are celebrating their destruction of the US healthcare system, some of the immediate results are hardly worth celebrating. Several of the largest private US employers have announced that they expect profit losses due to increased costs as a result of obamacare. (story here from Businessweek.com)

AT&T Inc. will book $1 billion in first-quarter costs related to the health-care law signed this week by President Barack Obama, the most of any U.S. company so far.A change in the tax treatment of Medicare subsidies triggered the non-cash expense, and the company will consider changes to the benefits it offers current and retired workers, Dallas-based AT&T said today in a regulatory filing.

AT&T, the biggest U.S. phone company, joins Caterpillar Inc., AK Steel Holding Corp. and 3M Co. in recording non-cash expenses against earnings as a result of the law. Health-care costs may shave as much as $14 billion from U.S. corporate profits, according to an estimate by benefits consulting firm Towers Watson. AT&T employed about 281,000 people as of the end of January.

“Companies like AT&T, that have large employee bases, are going to have higher health-care costs and, therefore, lower earnings unless they can negotiate something or offer less to their employees,” said Chris Larsen, an analyst at Piper Jaffray & Co. in New York, who rates AT&T shares “overweight” and doesn’t own any himself.

AT&T previously received a tax-free benefit from the government to subsidize health-care costs for retirees, who would otherwise be on a Medicare Part D plan. Under the new bill, AT&T will no longer be able to deduct that subsidy.

Jeez, who didn’t see that coming? Remember one thing here – that $14B in lost profits is money that could have been used to hire new employees. As this situation gets worse, expect the government reaction to be a big push for a single payer system. That way corporate America can offload their increased healthcare burden to the taxpayer.

Our government is digging a huge financial hole that we may never be able to climb out of. The majority didn’t want this gigantic crap sandwich but we got it anyway. Remember this come November.

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One Response to “obamacare costs business profits – already”

  1. […] obamacare, several large private employers announced that their profits would suffer as a result. (more here) Apparently this embarrassing new revelation has some democrats in a huff. They want to call these […]

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