WH: Businesses cutting benefits long before O-Care

The White House on Thursday pushed back on reports that some companies were reducing their retirement benefits to pay for higher costs related to ObamaCare, saying that under the program the growth of healthcare costs has been historically low.

Earlier in the day, chief executive Tim Armstrong told CNBC that AOL would change how it distributed its 401(k) benefit matches to account for millions in additional costs from the president’s signature healthcare law.

ADVERTISEMENT
"As a CEO and as a management team, we have to decide: Do we pass the $7.1 million of ObamaCare cost to our employees? Or do we try to eat as much of that as possible and cut benefits?” Armstrong said.

But White House press secretary Jay Carney noted that employers had been slashing health benefits even before the Affordable Care Act (ACA) was implemented.

“What has been the case for a long time is that employers have been making changes to healthcare benefits, or eliminating health insurance entirely,” Carney said. “That is a trend that has gone on for some time, long pre-dating the ACA, and that — and there are certainly changes that have been made, as all of you in the private sector know, to other benefit programs, including 401(k)s, long predating the ACA.”

He also argued that “every major business in America” had benefited from the historically low growth of healthcare costs.

“Any company that was projecting what their healthcare costs were going to be five years ago were basing those projections on estimates of healthcare cost inflation that have turned out to be much higher than reality, resulting in significant savings,” Carney said. “And that is tied in part, in significant part in our view to the Affordable Care Act becoming a reality."