Dec 28 2005
Healthcare Benefits to Hamstring Corporate Balance Sheets
In 2006, healthcare benefit promises will be required to be added to corporate balance sheets. To date, they have been footnotes. Now these massive obligations will be up, front and center for analysts to see — an estimated $300 billion unfunded tab. GM has already made it clear that it has little chance in honoring more than $77 billion of such promises, of which $61.4 billion is unfunded according to research at S&P.
Per S&P, that obligation stands at $292 billion for the 500 largest companies alone, nearly twice the exposure these firms have to pension obligations — a subject we’ve covered for many years already. Combined, that totals more than $440 billion — about one-fifth of the entire book value of those same companies according to the New York Post. Unlike pensions, healthcare promises have hardly anything backing them.
Read the entire NY Post article for the frightening details.
