Earnings management. The 2003 Medicare Reform act doesn't come into effect until 2006. However, companies are able to take advantage of it already in estimating future retirement healthcare benefits.

Long-range estimates of drug subsidies also provide firms with an opportunity to engage in a bit of earnings management. That's because the forecasts add gray areas to the task of figuring out a company's future overall retiree health-care liabilities. Predicting the eventual size of the subsidies, after all, involves forecasting such big unknowns as the future of retiree prescription-drug use, the prospects for pharmaceutical innovation, and the future cost of the drugs.
. . .
By providing companies with the chance to lowball their liability estimates — and, ultimately, cut reported expenses — the subsidies offer new leeway in using OPEB [other postretirement employee benefits] numbers to hit earnings targets, says Georgia Tech accounting professor Charles Mulford.