Companies Take Billions In Health Care Charges
New health care legislation is going to cost companies billions of dollars, according to internal projections and public announcements from a range of corporations including the bluest of the Blue Chips to small local outfits.
So far, companies have announced they will take at least $2.854B in one-time charges after health care legislation became law, thanks to a provision that will no longer allow companies to deduct subsidies it receives to provide seniors with prescription drug benefits.
In total, at least 15 companies have announced they will take charges to offset future costs of the health care measure. Phone giants AT&T and Verizon will be hit hardest; AT&T said last week it would take a $1B one-time charge, while Verizon announced yesterday it would set aside $970M.
The moves are largely pre-emptive. The provision does not become law for another 3 years, and admin officials believe companies are announcing their write-downs early in order to stoke opposition to the reform law, the Wall Street Journal reported Friday.
"Accounting rules required us to book a charge, and our filing was an update to stockholders," said McCall Butler, an AT&T spokesperson, in an email.
Manufacturing companies, including those that have laid off workers during the recession, will be hard-hit as well. John Deere, Boeing and Caterpillar all said they would take at least $100M in one-time charges.
A list of companies that have taken the charges, handing GOPers easy talking points as they look to sell their vision of the new law as a job-killer:
Company Charge AT&T $1B Verizon $970M John Deere $150M Boeing $150M Prudential $100M Caterpillar $100M Lockheed Martin $96M 3M $85M Exelon Corp. $65M
AK Steel $31M Eaton $25M
IL Tool Works $22M Xcel Energy $17M Valero $15M Honeywell $13M Goodrich $10M Allegheny Technologies $5M
We'll continue a running tally as companies make their plans known.
Updated: We've added Exelon and Eaton, both of which announced yesterday they would take additional charges.
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