3M to dump retirees from medical coverage

3M to dump retirees from medical coverage

Ed Morrissey
HotAir.com
Oct. 5, 2010

Remember when Barack Obama repeatedly promised that no one’s current coverage would have to change if Congress approved the health-care overhaul he demanded? When the ObamaCare bill passed, the Associated Press suddenly discovered that the change of tax law that would supposedly generate billions of dollars to pay for the costs of the bill would also drive companies to dump retirees from their existing drug coverage and push them into Medicare. Minnesota-based 3M became one of the first large corporations to do just that — and push retirees off of all their plans as well:

3M Co., citing new federal health laws, said Monday it won’t cover retirees with its corporate health-insurance plan starting in 2013.

Instead, the company will direct retirees to Medicare-backed insurance programs, and will provide reimbursement for that coverage. It’ll also reimburse retirees who are too young for Medicare; the company didn’t provide further details.

The company made the changes known in a memo to employees Friday; news of the move was reported in The Wall Street Journal and confirmed Monday by 3M spokeswoman Jackie Berry.

The ObamaCare bill created a fund to subsidize employers who didn’t dump their retirees, but the WSJ notes that it simply wasn’t enough to change the negative incentives created by the government interventions:

The changes won’t start to phase in until 2013. But they show how companies are beginning to respond to the new law, which should make it easier for people in their 50s and early-60s to find affordable policies on their own. While thousands of employers are tapping new funds from the law to keep retiree plans, 3M illustrates that others may not opt to retain such plans over the next few years. …

Democrats that crafted the legislation say they tried to incentivize companies to keep their retiree coverage intact, especially until 2014. The law creates a $5 billion fund for employers and unions to offset the cost of retiree health benefits. More than 2,000 entities, including many large public companies, have already been approved to submit claims for such reimbursement. 3M did not apply.

How did Democrats come up with the $5 billion figure for subsidies to protect retirees from losing their plans? From the looks of it, they simply made it up. They also didn’t do much calculation to determine whether the subsidies would actually incentivize employers into rejecting this strategy for cost savings. To some extent, they may not have been able to make that calculation, because thanks to the massive amount of ambiguity in the bill, no one can really say for sure what the future costs would be. And of course, that’s why 3M chose now to dump the retirees.

3m has 23,000 retirees, many of them likely to be living in Minnesota. They’re also likely to vote in the upcoming midterms, perhaps even more likely now than ever. That won’t be good news for House Democrats in the Minnesota delegation hoping to win a new term in four weeks.

I could have foreseen that. Companies like this just see this as another way to increase profits. Dropping medical coverage "because the gov't is taking care of it now" is something I expected from large companies that have no problem sticking the tax payer with their old employees.

BubbleBliss wrote:
I could have foreseen that. Companies like this just see this as another way to increase profits. Dropping medical coverage "because the gov't is taking care of it now" is something I expected from large companies that have no problem sticking the tax payer with their old employees.

So, by your logic, they should start losing money for the shareholders instead? No marginal profit? Yeesh. Yeah, shareholder. That's where the profit goes for the most part.


Yeah, you saw it coming, didn't you? Yet the heroes in DC pushed it anyways knowing damn well this was going to happen.

No, but the people who run those companies get billion dollar bonuses every year, maybe they should cut down on that and spend some of that on their retired employees' HC coverage!?

Just because a greedy company does this means that universal HC shouldn't be passed? Who runs the country, the government or the large corporations? These people lost their plans, but plenty more people gained coverage. It's a question of what outweights what.

BubbleBliss wrote:
No, but the people who run those companies get billion dollar bonuses every year, maybe they should cut down on that and spend some of that on their retired employees' HC coverage!?

Just because a greedy company does this means that universal HC shouldn't be passed? Who runs the country, the government or the large corporations? These people lost their plans, but plenty more people gained coverage. It's a question of what outweights what.

Number one, those bonuses you and the Democrats like to demonize are paid out of contract.

Greedy? They're protecting their shareholders. If the shareholders bail, then the corporation sinks. Look at BP's stock after the oil well blowout. They got hurt big time. That's not the same thing as here but just a relevant point to get across.

The people run the country, not the gov't. We don't have an imperial gov't. We tend to like the states to decide what happens and not the fed. Our constitution demands it.

Yeah, some lost and others gained. The haves lost and the have-nots gained. I guess that's social "justice" for some.

TexasBlue wrote:

BubbleBliss wrote:
No, but the people who run those companies get billion dollar bonuses every year, maybe they should cut down on that and spend some of that on their retired employees' HC coverage!?

Just because a greedy company does this means that universal HC shouldn't be passed? Who runs the country, the government or the large corporations? These people lost their plans, but plenty more people gained coverage. It's a question of what outweights what.

Number one, those bonuses you and the Democrats like to demonize are paid out of contract.

So what? That doesn't make the tiniest difference.

TexasBlue wrote:

Greedy? They're protecting their shareholders. If the shareholders bail, then the corporation sinks. Look at BP's stock after the oil well blowout. They got hurt big time. That's not the same thing as here but just a relevant point to get across.

No, they're not. Billion dollar bonuses go into the pockets of upper level management and CEO's, that does not affect that shareholder or the business.

TexasBlue wrote:

The people run the country, not the gov't. We don't have an imperial gov't. We tend to like the states to decide what happens and not the fed. Our constitution demands it.

Who funds the politicians that are supposed to represent the people? Without that funding, those politicians would never have the chance to represent the people.

TexasBlue wrote:

Yeah, some lost and others gained. The haves lost and the have-nots gained. I guess that's social "justice" for some.

That's conservative bullshit pure and simple.

BubbleBliss wrote:

TexasBlue wrote:

BubbleBliss wrote:
No, but the people who run those companies get billion dollar bonuses every year, maybe they should cut down on that and spend some of that on their retired employees' HC coverage!?

Just because a greedy company does this means that universal HC shouldn't be passed? Who runs the country, the government or the large corporations? These people lost their plans, but plenty more people gained coverage. It's a question of what outweights what.

Number one, those bonuses you and the Democrats like to demonize are paid out of contract.

So what? That doesn't make the tiniest difference.

It does make a difference! If you enter into a contract, you abide by it or get sued and you darn well know it!

TexasBlue wrote:

BubbleBliss wrote:
Greedy? They're protecting their shareholders. If the shareholders bail, then the corporation sinks. Look at BP's stock after the oil well blowout. They got hurt big time. That's not the same thing as here but just a relevant point to get across.

No, they're not. Billion dollar bonuses go into the pockets of upper level management and CEO's, that does not affect that shareholder or the business.

You said Greedy company! You seem to apply a different set of standards to CEO's and the corporation. The CEO's get their bonuses (that you're so focused on) via contracts. The PROFIT that the corporation makes goes back into the company (research and development depending on the corporation) and to the shareholders. There is no "owner" of the company.

TexasBlue wrote:

BubbleBliss wrote:
The people run the country, not the gov't. We don't have an imperial gov't. We tend to like the states to decide what happens and not the fed. Our constitution demands it.

Who funds the politicians that are supposed to represent the people? Without that funding, those politicians would never have the chance to represent the people.

HAHAHA!!! Now that's funny!

TexasBlue wrote:

BubbleBliss wrote:
Yeah, some lost and others gained. The haves lost and the have-nots gained. I guess that's social "justice" for some.

That's conservative bullshit pure and simple.

Why? It's the fuqqing truth! Obama and the Dems passed this bill without reading it which in turn leads to unintended consequences. If they had rad the damn bill and actually let the Republicans have a voice in crafting the legislation (which they did not), then these unintended consequences wouldn't be raising it's ugly head. So now, we have insurance companies dropping certain types of coverage because they won't make a profit due to massive gov't intrusive regulations. Therefore, those who actually paid for their insurance in part thru their employer are now losing. On the gain end, it's the people who have none. But at the expense of those who had, those who didn't have it will now have some sort of subsidy. But on the other end of it all, more and more of this is going to happen where these insurance companies will be dropping more and more coverage types.

It isn't conservative "bullshit" like you say. It's pure fact because it's happening right under our feet as we debate this.

It doesn't make a difference whether it's in the contract or not, what matters is that they get it. How you think that it matters whether it's in a contract or not is beyond me. Fact is, they get the money that they could invest into taking care of their employees and retirees.

Thank you for explaining the difference between 'bonus' and 'profit' after years of business and economics classes, i wasn't aware of it. I said that the bonuses the upper management gets, the ones that are several billion dollars, could go into taking care of employees. Yet the upper management would rather stuff its pockets instead of doing that, that's greed pure and simple.

When's the last time you saw a politician that wasn't funded by large corporations?

I guess the fact that insurance companies can't drop your coverage while being sick also only benefits the 'have-nots'?

BubbleBliss wrote:
It doesn't make a difference whether it's in the contract or not, what matters is that they get it. How you think that it matters whether it's in a contract or not is beyond me. Fact is, they get the money that they could invest into taking care of their employees and retirees.

Thank you for explaining the difference between 'bonus' and 'profit' after years of business and economics classes, i wasn't aware of it. I said that the bonuses the upper management gets, the ones that are several billion dollars, could go into taking care of employees. Yet the upper management would rather stuff its pockets instead of doing that, that's greed pure and simple.

When's the last time you saw a politician that wasn't funded by large corporations?

I guess the fact that insurance companies can't drop your coverage while being sick also only benefits the 'have-nots'?

You say you took classes on economics, etc. Yet you rail against bonuses. These aren't even worth debating. You obviously don't know how a corporation goes about this or you couldn't even say such silly things. You know damn well how a CEO is written a bonus. You know how it is done in relation to the board of directors (who are voted into place). It has nothing to do with profits.

What this is turning into is the same tired argument on the CEO's when the focus should be on how the dumb asses running the congress borked this HC bill up so bad that it's unbelievable.

What does a politician running for office being funded by corporation have to do with the Heath Care bill or the topic of the post?

As for insurance dropping coverage while sick.... if they can't drop coverage, then look for them to not take on coverage to avoid that.

Again, my point is how the Democrats rammed this bill thru without reading it. Now we have insurance companies doing exactly what the right was saying that they were going to end up doing. It's just happening much faster than even i expected it to.

BubbleBliss wrote:No, but the people who run those companies get billion dollar bonuses every year, maybe they should cut down on that and spend some of that on their retired employees' HC coverage!?

This is where your bias betrays you Bubbles (that was rather alliterative). A few seconds of research would show that NO CEO receives “billion dollar bonuses every year.” In fact, the most highly compensated CEO on the Forbes 500 list, Larry Ellison of Oracle (who no one is complaining about), made a little more than half a billion last year and he is the only one that close. The next closest CEO was Ray Irani of Occidental Petroleum at $222 million. And from the there, the pay begins to drop off significantly. See for yourself here!

All this bellyaching about heartless CEO’s not caring about the poor downtrodden proletariats working under them is pure liberal fiction. It is an attempt to incite a class war where none could justifiably exist. If you would look at the REAL rates of compensation REAL CEO’s get (not the fictional liberal version of CEO’s and their “billion dollar” bonuses), you would realize there is no way their pay could even begin to float the health care of their company’s retired employees. That you would even suggest this only points up just how out of touch you are with the realities of CEO compensation and the things it takes to run a complex multinational corporation.

BubbleBliss wrote:Just because a greedy company does this means that universal HC shouldn't be passed? Who runs the country, the government or the large corporations? These people lost their plans, but plenty more people gained coverage. It's a question of what outweights what.

*Sigh* It’s always greed with you kiddo. This is such a simplistic view of a very complex problem that it is not likely to be worth it to debate the issue with you (damn! more alliteration... I’m on fire!).

Look, reread the piece, realize that Obama care is driving health care costs UP not down as was promised. Why is it driving health care costs up? Because the federal government is MANDATING coverage for things the insurance companies cannot afford to cover without raising their prices!!! Just because the federal government has decided to, say, force all insurers to cover persons with pre-existing conditions for instance, doesn’t mean that insurance companies can ignore the laws of economics and provide said coverage by waving a magic government wand!!!

And corporations cannot afford to keep providing health care coverage to retirees when those costs continue to skyrocket thanks to GOVERNMENT INTERFERENCE (read that Obamacare in this case) in the health insurance market. And the measly $5 billion the bill sets aside to “incentivize” companies to keep their retirees on company plans wouldn’t even make an atom-sized dent in the actual costs to corporations of Obamacare.

I know you hate to hear this, but companies are NOT in the business of giving people jobs and health care. That are in the business of selling stuff in demand and making a profit for themselves and their shareholders. THAT is their primary responsibility! That this involves employing people and compensating them in such a way as they deem sufficient to contribute their labor to the enterprise is just a happy side effect of free market capitalism.

Plenty of multi-national corporations do it, it's only the American ones that fail to provide decent HC for their employees. Even the American companies in Europe manage to do it. I fail to see how they're so different from their American counter parts.

BubbleBliss wrote:
Plenty of multi-national corporations do it, it's only the American ones that fail to provide decent HC for their employees. Even the American companies in Europe manage to do it. I fail to see how they're so different from their American counter parts.

Then I suggest you consult a map. There's an old saying in marketing and real estate... it's all about location, location, location....

Those companies in Europe, are in Europe, not America. The laws governing insurance companies in America are both federal and state laws, and then there is the mountain of regulations, both federal and state, that must be complied with and whose bewildering complexity has actually created an entire new industry - businesses who do nothing but handle that mountain of paperwork those laws and regulations require. And then you have our tort system, which currently serves only to harass insurers and health care providers with a tsunami of frivolous laws suits, which, if lost by the claimant, then does not penalize that claimant. That system also provides for awards all out of relation to reality when it comes to actual damages. All of these things carry a cost.

So I would submit that if American companies operating businesses in Europe can afford to provide better health care benefits than they can in their businesses operating in America, then something just might be wrong with the way the government is handling this here. Which is what I have been saying for a very, very long time.

Or, it might be that those companies in Europe have no choice in the health care they provide, but there are other financial benefits from operating there (lower taxes, or whatever) that offset those increased health insurance costs.

Either way, there is no denying that our current system needs a serious overhaul, and turning it over to the federal government is the LAST thing we should be thinking of doing. Social Security, Medicare and Medicaid PROVE that the federal government cannot not operate any thing better than the private sector.

Yet another example why companies outsource to other countries.

And why such practices should be illegal.

dblboggie wrote:Or, it might be that those companies in Europe have no choice in the health care they provide,

There is no obligation for any business here to provide private healthcare.