President Obama claimed it was necessary for the government to take over health care to make U.S. companies more competitive internationally. The president’s argument was that Obamacare would lower company costs for providing health insurance. Surprise, surprise, the opposite is true, as corporations are predicting crippling health care costs in the wake of the Democrats’ new law.
Barely a week after Mr. Obama signed the government health care takeover, numerous major corporations have announced huge write downs because of increased costs. These adjustments reflect sudden unexpected increases over what these firms had previously budgeted to spend before Obamacare became the law of the land.
The amount of cash involved is huge. AT&T Inc. will write off a one-time charge of $1 billion in its first-quarter; John Deere faces $150 million; 3M $90 million; Caterpillar $100 million; Prudential $100 million; Valero Energy $20 million; and AK Steel $31 million. These companies represent a full range of industries, including financial, communications, manufacturing and energy.
This squandered fortune is only the tip of the Obamacare iceberg because firms are still trying to figure out what else lurks in the nearly 3,000 pages of new government health regulations. There’s also the looming expense of the more than 100 new regulatory agencies that were created by the law but have yet to start meddling with private enterprises.
Contrary to Mr. Obama’s claim of enhanced competitiveness, Obamacare saddles American companies with massive, unpredictable expenses far into the future. This undermines corporate value, which is based on long-term stability. With national unemployment stuck around 10 percent, employers do not need additional costs imposed on them. Unfortunately, Obamacare makes U.S. businesses less competitive by raising the cost of operating in this country.