TRYIN' TO KEEP IT REAL FOR EMPLOYERS

Rep. Henry Waxman (D - CA), Chairman of the powerful House Energy and Commerce Committee, indignantly called out several big corporations for raining on the healthcare reform parade recently... a Committee hearing (characterized by some as an "inquisition") was hastily scheduled for later this month to air grievances.

Waxman has since cancelled the hearing with firms that had taken big earnings charges in anticipation of higher costs under provisions of the new health care reform law.

Waxman's staff investigators subsequently reviewed the actions of AT&T, Verizon, Caterpillar and others to take billions of dollars in write-downs due to the new law's elimination of their ability to deduct federal subsidies toward providing retiree prescription drug coverage.

Turns out, the staff review found that the companies acted "properly and in accordance with accounting standards" when they took these write-downs; thus, no hearing. Waxman's spin: a statement that while this provision might cost companies money, other provisions in the law should reduce their costs...

The statement suggested, for instance, the influx of younger, healthier people into the coverage pool due to the individual mandate in the law will potentially lower average participant costs for companies' health plans. That implication is better than a sharp stick in the eye, but it fails to recognize the simple fact that the inherent enrollment increase in the employer's plan would raise the employer's overall costs proportionally.

As the sound bite wars will continue, so will our attempts to pierce the rhetoric and identify how aspects of the reform law could impact employer sponsors of health benefit plans in the real world.