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AT&T sets 1 billion dollars aside for health reform costs

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US communications giant AT&T said on Friday it took a one billion dollar charge in the first quarter of 2010 to cover changes in US health care law.

Just days after President Barack Obama announced landmark overhaul of health care, AT&T said it would need the sum to cover changes in the taxation on prescription drugs for seniors. “AT&T Inc. intends to take a non-cash charge of approximately one billion (dollars) in the first quarter of 2010 to reflect the impact of this change,” the firm said in a filing with the Securities and Exchange Commission.

“As a result of this legislation, including the additional tax burden, AT&T will be evaluating prospective changes to the active and retiree health care benefits offered by the company.” The Dallas, Texas-based company joins at least three other firms who have projected high costs because of the reforms, which would spread health care insurance to around 32 million more Americans.

On Tuesday Caterpillar announced it had set aside 100 million dollars after tax in the first quarter to cover expected costs. AK Steel predicted a charge of 31 million dollars while John Deere said it might cost the firm 150 million dollars. The new measures would see a cut in subsidies that companies get for providing prescription drug coverage to seniors. The new levies are not due to come into effect until 2011. At 1910 GMT AT&T stocks were trading marginally up 0.16 percent at 26.68 dollars.

New York, March 26, 2010 (AFP)