Deere & Co. believes the health care reform legislation will increase \ related costs by $150 million this year they announced on Thursday.
Deere is the largest U.S. producer of farm equipment is the second major corporation to make a prediction on the expense changes to expect in fiscal 2010.
Deere and Caterpillar Inc., were one of 10 companies that sent cautionary letter to Congressional leaders, warning them to expect cost increases with the healthcare overhaul legislation. Both companies expect a one time $100 million subsidy charge as they bend to the heightened taxes.
The companies put forth statistic indicating federal subsidies have covered 28 percent of the expense of prescription drug coverage for retirees. The government provided the subsidies to encourage companies to continue to provide coverage to retirees and avoid their turning to Medicare Part D as a back-up.
Under the recently passed healthcare reforms; however, that subsidy will be taxed beginning in 2011, which they anticipate will spike government health care expenses as companies discontinue coverage for retirees.
In their congressional letter, Deer and Caterpillar Inc. wrote: "Taxing the subsidy means that more companies will eliminate or reduce the coverage, and more retirees will shift to Medicare Part D, which will create more cost for both the government and the retirees."
About EQUITIES:
Since 1951, EQUITIES Magazine has been a leading media company providing business editorial content designed to serve the needs of business leaders, professionals, institutional investors and retail investors. We are focused on business and the business of making money, not on lifestyle subjects. We publish original reporting in print and on our website, as well as select content at www.nasdaq.com. For 28 years we have hosted our own branded investor conferences that connect public company CEO’s with our loyal readers in the investment community.
Sign up for a free one-year subscription
