Why Waxman really canceled his health care ‘show trial’

Jonathan Strong Jonathan Strong, 27, is a reporter for the Daily Caller covering Congress. Previously, he was a reporter for Inside EPA where he wrote about environmental regulation in great detail, and before that a staffer for Rep. Dan Lungren (R-CA). Strong graduated from Wheaton College (IL) with a degree in political science in 2006. He is a huge fan of and season ticket holder to the Washington Capitals hockey team. Strong and his wife reside in Arlington.
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Immediately after President Obama signed his health-care bill into law, several large companies disclosed to investors just how big the tax hit from it would be. AT&T, for instance, said that the law’s tax increases alone would cost the company $1 billion.

Key committee chairman Rep. Henry Waxman, California Democrat — whose energetic investigations are loathed by many in Washington — demanded reams of documents to investigate whether the companies were making a political show out of the cost disclosures.

And then … nothing. Waxman at the last minute canceled a hearing to grill executives about the issue.

Publicly, Waxman said the investigation showed the companies’ disclosures were properly filed. But a new report from committee Republicans reveals the documents Waxman obtained included embarrassing evidence that the health-care law could drive up insurance premiums and force employers to dump employees from their health plans.

“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,” Energy and Commerce Committee ranking member Rep. Joe Barton, Texas Republican, said.

Most significantly, documents unearthed by the investigation highlight companies that are considering dumping employees from their current health-care plans in the face of new costs from the health-care law. President Obama repeatedly promised his health-care law would let Americans keep their current insurance if they’re happy with it.

A March 3 internal Verizon memo on the impact health-care law said new taxes on insurance companies and health-care equipment manufacturers will be passed onto employers through higher prices.

Facing such increased costs, employers like Verizon “may consider exiting the health-care market and send employees to the exchanges,” the memo says.

Under the law, companies would pay fines for not providing insurance companies coverage. But, the Verizon memo said, the fines would be “modest” compared to providing coverage for employees.

In a March 25 e-mail, John Deere’s director of labor relations, Kenneth Hugh, said, “We ought to look at … denying coverage and just paying the penalty … we would need to figure out which one was more expensive.” John Deere faces a unique situation because of contracts with its unionized workers.

Whether or not companies are being forced to rescind employee coverage, they may need to raise insurance premiums, the documents show.

The top human resources official at Caterpillar said in a March 23 e-mail that the company will need to “figure out what this will cost us and collect that in increased premiums which we will attribute to the legislation.”

Waxman, in calling off the investigation into the companies, released a staff memo saying the companies had properly disclosed their new tax burdens to investors.

The memo included a summary of interviews between staff members and the companies, as well as some health-care trade associations.

Those interviews were conducted after Waxman had announced he was investigating the companies, so they had incentive to play nice. What they said, generally, was that if implemented properly, Obamacare could bend the cost curve downward and end up beneficial to businesses.

That’s a big “if.” Businesses right now are scrambling to understand the law’s details, and scores of new regulations must be promulgated by government bureaucracies before there is any full picture of what requirements they face.

The memo fails to address repeated instances of companies discussing rising costs because of the bill and the resultant premium increases or lost health-care coverage. As one Republican aide put it, “They were pointedly oblivious to the fact that anyone might be thinking about dropping health insurance coverage for their employees.”

A spokeswoman for Waxman did not reply to a request for comment by press time.

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