Overhaul Will Affect Other Economic Sectors, Not Just Health Care

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Also Included In: Medicare / Medicaid / SCHIP
Article Date: 26 Mar 2010 - 6:00 PDT

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Health-overhaul legislation signed into law this week will affect not only America's health care industry, but the broader economy, too, The Christian Science Monitor reports. The overhaul could help create jobs. "But the legislation also means tax hikes, mainly on the highest-income Americans. And provisions designed to curb healthcare costs probably aren't strong enough to put a big dent in medical inflation - or federal budget deficits" (Trumbull, 3/24).

The Wall Street Journal offers one example of how those taxes will affect companies in other sectors: "Caterpillar Inc. said Wednesday it will take a $100 million charge to earnings this quarter to reflect additional taxes stemming from newly enacted U.S. health-care legislation. The world's largest construction equipment manufacturer by sales, warned last week that provisions in the legislation would subject the company to federal income taxes on the subsidies it receives for providing prescription drug benefits for its retirees and their spouses" (Tita, 3/25).

One of the most pressing questions about the legislation, however, "is whether it will reduce health care costs for most Americans," USA Today writes. "Medical costs are rising fast - up 5.7% last year, while the economy declined 1.1%, according to the Centers for Medicare and Medicaid Services. In the next 10 years, health spending is projected to rise 6.1%, reaching $4.5 trillion, or nearly 20% of the economy. Some critics and even proponents of the law say it won't do enough to slow down that trend" (Wolf, 3/25).

Another issue: The legislation may not make much of a change in consumer protections for people covered by employer-sponsored insurance plans, The Dallas Morning News reports. "The law grandfathers many existing employer-sponsored plans, sparing them from the consumer protections that will apply to new plans, including minimum-benefit standards and limits on how much a worker can pay in out-of-pocket medical costs" (Michaels, 3/25).

This information was reprinted from kaiserhealthnews.org with kind permission from the Henry J. Kaiser Family Foundation. You can view the entire Kaiser Daily Health Policy Report, search the archives and sign up for email delivery at kaiserhealthnews.org.

© Henry J. Kaiser Family Foundation. All rights reserved.



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