I had to read these news stories several times to make sure I understood what all the crying was about; this one on AT&T taking a $1 billion charge for a new health care reform law and, of course, threatening to decrease its health care benefits to its retirees, and this one about 300 large corporations lobbying for repeal of the same, new health care reform accounting requirement. I guess what surprised me most is that I learned by reading these stories that President Bush and the 2003 Republican Congress gave away more of our tax money to corporations with that Medicare Prescription Drug Plan D of 2003 than to just drug companies. And then, on top of the give-away, those companies were allowed to take a tax deduction on the amount given them. Wow! That's like a double subsidy. Talk about a boondoggle!
Don't you remember Plan D? It's the plan that says Medicare, or a Medicare subsidized personal plan like Kaiser or Blue Cross, and I guess in the case of AT&T's plan, will pay a large portion of your prescription cost up to a limit, around $2,500. So, if your drugs cost you more than $2,500, you hit the “Gap,” and the Gap is where you pay full price for the drugs from $2,500 until you've paid around $4,500, and then Medicare (or AT&T) subsidies kick in again. It is a huge cost to those people who need high cost medicine. In fact, some poorer people just stopped taking their much needed drugs. The plan didn't financially hurt companies as much as it hurt the patient.
I can hear AT&T's CFO (Chief Financial Officer) now, “Look at this, CEO. This Prescription Drug Plan is going to give us 28% tax-free of any drug plan we have for our retirees and then let's us deduct that from our taxes, which adds another 35% of the 28% to profit, if we make a plan for our retirees. Then, we don't have to pay for the drugs when a retiree hits the Gap. Wow! We can also deduct any amount we directly contribute to the plan, that other 72%. This is like free money, CEO! And we don't have to sell a single phone to get it!” And off they went with a drug plan for their retirees.
Now, AT&T is crying because this so-called “Loop Hole” has been closed. A loop hole implies that the Congress and President made a mistake that gave out more than intended. Ha! Don't believe it. This loop hole was specifically intended by those lobbyist who actually wrote the Prescription Drug Plan D and the Republicans and Bush-II liked it.
AT&T, and those other 300 companies, are not going to create benefit plans unless they absolutely have to by law, or it is profitable. That, you can believe. And, since they can still deduct that 72% that they directly pay into the benefit plan, I'll bet that they don't reduce the plan by one single retiree. I'll bet that it will still be profitable to them to continue it. That, too, you can believe. They were not forced by law to have a drug plan for retirees, that was optional. They did it only to get the subsidy and tax break; the free money.
What we really need is Single-Payer Health Care. That would stop all of these give-away tax-free subsidies to corporations. AT&T would really scream bloody murder then. They may have to go to work selling phones for all of their profit. As for the news articles, I smell a rat in the Financial Department and their Lobbyist Corporation. It ain't what it appears to be.
By the way, I see that AT&T's stock price is bouncing back, up nearly $1.00 from yesterday's downturn hit by these news stories. Too bad. Had I thought about it yesterday, I would have bought a thousand shares of AT&T real quick while it was down so much. AT&T isn't going to lose money, you can count on it. I would have made about $1.00 a share just from yesterday. I may still buy it. It's a good bet.