Health Care Bill Passes; Caterpillar Inc. Expects Dramatic Cost Increases

Heavy equipment manufacturer, Caterpillar Inc., based in Peoria, Illinois, told House Speaker Nancy Pelosi and Rep. John Boehner that the bills will raise its costs by $100 million in the first year alone.

"We can ill-afford cost increases that place us at a disadvantage versus our global competitors," said the letter signed by Gregory Folley, vice president and chief human resources officer of Caterpillar. "We are disappointed that efforts at reform have not addressed the cost concerns we've raised throughout the year."

The National Federation of Independent Business (NFIB) posted a document online titled "Four Unaffordable Facts about H.R 3590."

"The small business tax credit will do little to nothing to make purchasing insurance affordable for more small firms. A tax credit that is poorly structured is not going to provide sustainable and long-term relief from high healthcare costs.

"[There is] a health insurance fee, this tax is actually a tax on small business. The new $6.7 billion annual tax is structured as a fee on insurers. However, one thing health insurers have made clear: new taxes on them mean new costs passed on to customers. Small businesses will be paying for this new fee.

"Any company in the 'construction industry' (which is NOT defined in the legislation) with more than 5 employees and a payroll of more than $250,000 is mandated to provide government-approved health insurance to employees or pay expensive penalties.

The NFIB notes that unemployment in the construction industry is already 27 percent.

"Not only does H.R. 3590 increase the Medicare payroll tax but it uses the additional revenue to pay for non-Medicare programs, creating a dangerous precedent to use payroll taxes to pay for more non-Medicare programs in the future."

In addition, many employers with more than 50 workers that don't offer coverage will be subject to a penalty. The reconciliation bill will change the penalty to $2,000 per worker, from $750 in the Senate bill, and subtract out the first 30 employees.