Jan 30, 2006
The new confusing, expensive Medicare D prescription drug plan that provides very little benefit for most elderly people is a big bonanza for some corporations. Companies that continue to provide prescription drug coverage will receive a $668 subsidy for every person covered who is over 65 and eligible for Medicare. The company gets that money even if the retiree never uses one penny’s worth of prescriptions. And they get it even if they cut back coverage they offer, as GM and Ford just did.
The federal government will pay out 5.9 billion dollars to these corporations this year, and 71 billion dollars over the next 10 years. That money is tax-free, so it amounts to about 100 billion dollars in income for the companies if they were taxed on it.
The auto companies, for example, which recently extracted concessions from their workers to pay for retiree health coverage, will benefit enormously. General Motors has almost 300,000 hourly retirees and spouses and another 130,000 salaried retirees. Not all of these retirees are Medicare-eligible, but that still means GM will receive more than 200 million dollars in subsidies every year! Ford stands to receive more than 100 million dollars a year. They never mentioned it when they asked workers for concessions.
Any company that provides retiree medical benefits was supposed to be putting aside money during all the years retirees worked. If that money’s not there today, the bosses stole it.
This subsidy is just a reward for stealing!