That’s reality, something the left routinely attempts to pretend doesn’t exist.
Some examples of the point – ObamaCare will put 30 million more people on insurance rolls Yay, problem of health care solved, right?
No, of course not. There will still be the same number of doctors and hours in a day. As we’ve been saying repeatedly, getting insurance does not mean you’ll be able to see a doctor.
And then there are the new requirements placed on doctors by ObamaCare that further exacerbate the problem.
Take preventive care. ObamaCare says that health insurance must cover the tests and procedures recommended by the U.S. Preventive Services Task Force. What would that involve? In the American Journal of Public Health (2003), scholars at Duke University calculated that arranging for and counseling patients about all those screenings would require 1,773 hours of the average primary-care physician’s time each year, or 7.4 hours per working day.
So, a doctor either commits to 10 or 12 hours of work a day or she sees patients for other reasons for 2/3rds an hour a day.
Or try this:
Meanwhile, the administration never seems to tire of reminding seniors that they are entitled to a free annual checkup. Its new campaign is focused on women. Thanks to health reform, they are being told, they will have access to free breast and pelvic exams and even free contraceptives. Once ObamaCare fully takes effect, all of us will be entitled to a long list of preventive services—with no deductible or copayment.
Of course, none of that is “free”, but much of it will also tie up a doctor’s time. Preventive care costs money – lots of money – and when you have someone else paying for it, even more people will try to take advantage of that.
The left thinks that’s a feature, not a bug.
Here’s the real-world problem, however:
If the screenings turn up a real problem, there will have to be more testing and more counseling. Bottom line: To meet the promise of free preventive care nationwide, every family doctor in America would have to work full-time delivering it, leaving no time for all the other things they need to do.
In effect, it is government mandating treatment that fills up the doctor’s time when much of that treatment may not be necessary. But that call has been taken out of the doctor’s hands with this law. If a patient demands all their “free” stuff, then what?
I often harp on the fact that the left seems sublimely ignorant on how the laws of economics work. Well, what ObamaCare has set up are exactly the same conditions that plague most government run healthcare systems:
When demand exceeds supply in a normal market, the price rises until it reaches a market-clearing level. But in this country, as in other developed nations, Americans do not primarily pay for care with their own money. They pay with time.
Prepare yourself for long waits for what you now consider to be routine problems. If it is routine you will likely have less of a chance of seeing a doctor than you do now. Best hope you can self- medicate or just wait out the problem. If it is a serious problem, you’ll most likely still be in for a wait.
As physicians increasingly have to allocate their time, patients in plans that pay below-market prices will likely wait longest. Those patients will be the elderly and the disabled on Medicare, low-income families on Medicaid, and (if the Massachusetts model is followed) people with subsidized insurance acquired in ObamaCare’s newly created health insurance exchanges.
Econ 101. So what is likely to happen?
When people cannot find a primary-care physician who will see them in a reasonable length of time, all too often they go to hospital emergency rooms.
Uh, wasn’t that a big part of the impetus behind creating ObamaCare? To “solve” that problem? In fact, it is likely to exacerbate it.
Of course the solution to the government made problem will be what? Most likely more government. Those patients who are in those plans that pay below-market reimbursement will complain to whom? Politicians. And vote hungry politicians will try to do what? "Fix” the problem they created. And who will they make the bad guys? Well, certainly not them – greedy doctors or insurance companies most likely.
You can see this coming from a mile off – well if your eyes aren’t full of moon dust and you have even a passing acquaintance with how the real world works.
As P.J. O’Rourke so aptly said, “If you think health care is expensive now, wait until you see what it costs when it’s free.”
Unless this monstrosity of a law is repealed, we’re about to find out.
Rob Port brings attention to the Papa John’s story:
At Slate, Matthew Yglesias scoffs at Papa Johns’ founder John Schnatter saying the Affordable Care Act, Obamacare, will drive up costs for his company by roughly $0.20 per order, something his company will be passing along to customers.
“Stipulating for a moment that this is true, doesn’t it seem like a rather small price to pay?” asks Yglesias.
No, it’s not small at all.
Rob then covers just the Papa John’s part of this formulation:
Papa John’s operates 3,973 restaurants. I can’t figure out how many orders the company processes daily, but let’s assume a very conservative 100 orders per store. That’s 397,300 orders every day. Adding $0.20 to ever order in additional labor costs translates into just over $29 million in additional costs for Papa Johns customers annually.
But, of course, as you’ve already figured out, if that’s true for Papa John’s, it is probably true for most other companies in the US as well.
So as Rob says, “no, it’s not small at all”. In fact, it is potentially a huge increase in the price people will pay for all goods and services.
Papa John’s isn’t alone in seeing a price increase in their futures. As the magazine relates, in its most recent earnings call, McDonald’s said the health care plan will cost their stores an extra $10,000 to $30,000. While the vast expansion of government power involved in the bill will result in more federal expenditures, the pizza magnate’s comment highlights the fact that it will create an across-the-board surtax on virtually all expenditures by families and individuals. This will mean an increase in the cost of living that will hit the poor a lot harder than the rich the president claims to want to tax.
In fact, as pointed out, it has the same effect as a tax on the poor.
Yet the left simply seems unable to wrap their heads around that. Here’s a commenter to the article I took the paragraph above from:
It is shocking that the CEO of Papa John’s and this magazine commentator would begrudge the near-poor workers of that company health insurance — and better healthcare for a few cents per pie!! Our country is based on the premise that we all pay a little more to help those less fortunate — the key here is “a little more.” Does anyone really object to that??
Yes. Strenuously. And by the way, this country was not founded on the premise “that we all pay a little more to help those less fortunate” and claiming that to be so is an attempt to rewrite history. It was about providing everyone an equal opportunity under the law to succeed while protecting their basic rights to life, liberty and property.
So we have the probability that prices will increase in the future as companies charge more for their products to cover health care. And that brings us to a pretty basic point, here made by Bethany Mandel at Commentary Magazine:
What this person and other liberals have wrong is this: It’s not about the price of pizza. If it were actually possible to improve healthcare for millions of Americans and insure millions more, conservatives would be on board. The basis of conservative opposition to ObamaCare is this: We do not think it will help the majority of Americans. The bill is titled the “Affordable Care Act,” but does nothing to make healthcare more affordable, nor will it improve health care. In reality, it provides a worse standard of care at a higher cost.
Under ObamaCare, 17 million Americans will be added to Medicaid’s rolls in order to move some Americans from the uninsured to the insured column. Are they actually better off?
I, of course, wouldn’t be “on board” if it had to do with government intervention, however I understand the point she’s trying to make. What has been passed won’t a) reduce costs and make health care more affordable or b) improve health care.
It is the “big lie” writ large. The parameters defining health care delivery are finite, not infinite. You have 24 hours in a day and x number of providers. Is adding 17 million to the welfare portion of government health care (the one most providers refuse to take because of the supreme hassle and low reimbursement rate) really going to improve their lives?
As Avik Roy notes, even though we’ll be paying more across the board to make it possible, probably not:
In July 2010, at National Review Online’s Critical Condition blog, I wrote about a University of Virginia study, published in Annals of Surgery, finding that surgical patients on Medicaid endured a 97 percent higher likelihood of in-hospital death than patients with private insurance, and a 13 percent greater chance of death than those with no insurance at all. I noted several other clinical studies that showed similar results.
And that’s before the 17 million are added. This is the mess we find ourselves in when agenda driven politicians pass laws they haven’t even read over and above the objections of the majority of the people.
It’s hard to call that a “representative democracy” isn’t it?
And, no, this still isn’t about pizza.
UPDATE: Morning Bell (Heritage Foundation) weighs in:
At least 60 percent of firms are estimating Obamacare will raise their health care costs, according to a new study released Wednesday by Mercer, a human resources consulting firm. One-third of those expect a cost increase of 5 percent or more.
The study states:
The employers that will be hit hardest are those with large part-time populations—employers in retail and hospitality services. Nearly half of these employers (46%) expect PPACA will push up cost by at least 3% in 2014—and another third don’t yet know what the impact will be.
An example of the impact from the CEO of CKE Restaurants:
The money to comply with the [Affordable Care Act] must come from somewhere. We use our revenue to pay our bills and expenses, to pay down our debt, and we reinvest what’s left in our business. That’s how we create jobs. There’s no corporate pot of gold we can go to, to cover increased health care costs. New unit construction will cease if we have to allocate moneys for that construction to the ACA. And building new restaurants is how we create jobs.
As we’ve said many times before, this isn’t rocket science and they’re called “economic laws” for a reason. Unfortunately the left continues to ignore them (or pretend they don’t exist) with predictable results.
Perhaps you remember the “clever” accounting trick (also known as double counting) that the Democrats used to claim that ObamaCare would save money?
You know, it would cut Medicare by 500 billion (after the election, of course). You were supposed to believe that was a net cut in spending, remember? Of course it wasn’t. It was simply shifting the money to “pay” for other areas of ObamaCare. There was no “net” savings.
Well the newest projection by the CBO is that it will actually be 716 billion over 10 years (2013 to 2022) and it will essentially gut Medicare. Of course the old folks will have voted before it goes into effect.
The result of the shift of the funds? The Foundry has it:
- A $260 billion payment cut for hospital services.
- A $39 billion payment cut for skilled nursing services.
- A $17 billion payment cut for hospice services.
- A $66 billion payment cut for home health services.
- A $33 billion payment cut for all other services.
- A $156 billion cut in payment rates in Medicare Advantage (MA); $156 billion is before considering interactions with other provisions. The House Ways and Means Committee was able to include interactions with other provisions, estimating the cuts to MA to be even higher, coming in at $308 billion.
- $56 billion in cuts for disproportionate share hospital (DSH) payments.* DSH payments go to hospitals that serve a large number of low-income patients.
- $114 billion in other provisions pertaining to Medicare, Medicaid, and CHIP* (does not include coverage-related provisions).
*Subtract $25 billion total between DSH payments and other provisions for spending that was cut from Medicaid and CHIP.
The effect will be fairly substantial and should be obvious to even the most staunch ObamaCare supporter:
The impact of these cuts will be detrimental to seniors’ access to care. The Medicare trustees 2012 report concludes that these lower Medicare payment rates will cause an estimated 15 percent of hospitals, skilled nursing facilities, and home health agencies to operate at a loss by 2019, 25 percent to operate at a loss in 2030, and 40 percent by 2050. Operating at a loss means these facilities are likely to cut back their services to Medicare patients or close their doors, making it more difficult for seniors to access these services.
In addition, as MA deteriorates under Obamacare’s cuts, many of those who are enrolled in MA (27 percent of total Medicare beneficiaries) will lose their current health coverage and be forced back into traditional Medicare, where Medicare providers will be subject to further cuts. The Centers for Medicare and Medicaid Services chief actuary predicted in 2010 that enrollment in MA would decrease 50 percent by 2017, when Obamacare’s cuts were estimated at only $145 billion. Now that the cuts have been increased to $156 billion (or possibly $308 billion, as the Ways and Means Committee estimates), MA enrollment will surely decrease even further.
But Obamacare’s raid of Medicare doesn’t stop with cuts; it includes a redirection of tax revenue from the Medicare payroll tax hike in Obamacare. The payroll tax funds Medicare Part A, the trust fund that is projected to become insolvent as soon as 2024. Obamacare increases the tax from 2.9 percent to 3.8 percent, which is projected to cost taxpayers $318 billion from 2013 to 2022. However, for the very first time, Obamacare does not use the tax revenue from the increased Medicare payroll tax to pay for Medicare; the money is used to fund other parts of Obamacare, much like the $716 billion in cuts are.
That in addition to the fact that Medicare still has 37 trillion in unfunded mandates.
Also note the tax increase in the last paragraph (yes, that would be a middle class tax increase) and how the funds will not support the program with the 37 trillion problem.
Now we can argue all we want about the existence or non-existence of “death panels”, but here we have exactly what was predicted prior to this abortion of a law being passed. Rationed care (“… cut back services to Medicare patients or close their doors, making it more difficult for seniors to access these services.”) driven by these cost cuts are defacto “death panels”.
As the Foundry concludes:
With a raid on Medicare of this magnitude, President Obama’s assertion that his new law is protecting seniors and Medicare is astonishing. The truth is that Obamacare does the opposite.
But hey, this is the same President who claims his economic policy is working too. See previous post for the reality of that claim.
The reason this cut takes place in 2013 is obvious. If seniors were aware of its impact, you know how they’d vote.
Whether you do or don’t support Medicare isn’t the point, it’s the bald faced lies that have been put forward claiming something that isn’t at all true. And now the numbers are out that prove that.
Again, something which should be front and center as a major issue in this political season.
But it won’t be.
This week, Bruce, Michael, and Dale talk about Supreme Court, The state of the nation, and the Aurora, CO shooting.
The direct link to the podcast can be found here.
As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here. For podcasts from 2005 to 2010, they can be accessed through the RSS Archive Feed.
Yesterday, as the Republican controlled House of Representatives voted for the 30th time to repeal ObamaCare, Nancy Pelosi said:
“We put forth a vision for the middle class to make health care a right, not a privilege for all Americans. Today, as they have done more than 30 times this Congress, Republicans will vote to take away that right.”
Pelosi, among many of our legislators and politicians in general, displays a level of ignorance about rights and privileges that seems pretty basic to me. Governments don’t grant rights, they grant privileges no matter how hard they try to characterize what they do as a “right”.
A right, to be a right, must be inherent. It is something you have even before government shows up. The right to life. The right to liberty. As our founders identified these rights, they’re “inalienable”.
The best government can do, and the true foundation of a just government, is the acknowledge and protect our inherent rights. I.e government should exist to protect those rights.
Real rights are passive. They don’t require the assets, time, labor or commitment of others to enable their execution. Health care, of course, is a perfect example of a pseudo“right” which requires all of that.
Anything that government can give you (remember, we had the inherent rights I talk about before government existed and we formed the government to acknowledge and protect them – see founding documents) is not a “right.” And when government has to use it’s coercive power to “enable” these pseudo “rights” as it has in this health insurance debacle, it isn’t a right.
There is no right to health care. Period. There never has been. You have no inherent right to demand someone else use their skills, time and assets to service your health. You certainly have the right to negotiate and reach a voluntary agreement (see liberty) with health care providers based on a mutual exchange of value (see property). But “right” – no.
And besides, what Pelosi et al really cranked out was a requirement to buy health insurance via the coercive taxing authority of government. It no more guarantees health care as a right than the previous system. You still have to find a health care provider to accept your insurance and agree to treat you. In fact, it’s even tough to characterize the ObamaCare monstrosity as a government granted “privilege”.
Back to the point – this fundamental ignorance about rights and privileges, however, is at the root of many of our problems. For decades we’ve allowed government to get away with calling things it grants “rights” to the point that the concept of rights is so muddled that most people don’t understand them at all and have fallen for the government line.
Falling for that line helps enable horrific legislation like ObamaCare because it gives it cover, a veneer of "good” the proponents use to push their agenda. Who wouldn’t be for something that’s a “right”?
My point: Don’t let them misuse the word. Call people and politicians who do this out. Make them substantiate their claim of a right and when they can’t point out what is really going on. They’re talking about a privilege established by government coercion. That’s not freedom. That’s not liberty, two things you have a right to expect and something these privileges usually curtail.
It’s time to take back the political language. And there’s no better place to start with the understanding that government’s don’t and can’t grant rights.
President Obama is on his newest attempt to change the subject and find something to take to the people that might interest them and distract from his abysmal economic performance. It’s taxes. Specifically, he’s decided to make an issue of the automatic tax increases that will take effect in January and claim he does not want to see taxes increase on anyone but those nasty rich who need to “pay their fair share”. Or, back to class warfare.
A) He likes to refer to these as the “Bush tax cuts”. In fact, they’re the current tax rate. Have been for years. What he wants to do is see a tax increase on the rich, but no one else. I’m not sure how else one characterizes that but “class warfare”, especially given the percentage of total taxes that top income group pays already.
B) Republicans are saying no tax increases on anyone. Democrats like to characterize that as protecting the rich. I like to characterize it as an attempt to address the real problem – out of control government spending.
C) The nasty “rich” Obama wants to tax also include almost a million small businesses. That’s one of the primary reasons, in this weakening economy, that Republicans are right not to agree to any tax increases. It is both stupid and economically suicidal. But then you have to know about economics and the business world to understand that.
D) Democrats had two years of a complete monopoly on government to get this done and didn’t. It’s not the Republicans who have prevented anything. It is total incompetence on the Democratic side of the aisle. And, as Obama’s favorite pastor likes to say, “those chickens are coming home to roost”.
E) Finally, Barack Obama has already raised taxes on the middle class despite his statement in a speech yesterday claiming he had no desire to raise middle class taxes.
The tax is called the mandate in ObamaCare. It goes like this:
75% of the mandate tax falls on the middle class. That is a middle class tax hike in anyone’s book.
So when he claims he has no desire to raise the taxes on the middle class, that may be true … now. Because, in fact, he’s already done it.
I’ve read all the pundits and listened to all the talking head elite tell us how incredibly nuanced and subtle the Chief Justice was by approving the law as a tax. In fact one described him as “"a chess master, a statesman, a Burkean minimalist, a battle-loser but war-winner, a Daniel Webster for our times."
I say “BS”. He sold out. He ended up being more worried about the perception of the court and his legacy than upholding the Constitution of the United States. And I’m not the only one who feels that way. The Wall Street Journal also throws a punch or two at Roberts:
His ruling, with its multiple contradictions and inconsistencies, reads if it were written by someone affronted by the government’s core constitutional claims but who wanted to uphold the law anyway to avoid political blowback and thus found a pretext for doing so in the taxing power.
If this understanding is correct, then Chief Justice Roberts behaved like a politician, which is more corrosive to the rule of law and the Court’s legitimacy than any abuse it would have taken from a ruling that President Obama disliked. The irony is that the Chief Justice’s cheering section is praising his political skills, not his reasoning. Judges are not supposed to invent political compromises.
"It is not our job," the Chief Justice writes, "to protect the people from the consequences of their political choices." But the Court’s most important role is to protect liberty when the political branches exceed the Constitution’s bounds, not to bless their excesses in the interests of political or personal expediency or both. On one of the most consequential cases he will ever hear, Chief Justice Roberts failed this most basic responsibility.
Precisely. And Roberts caved. From the lecture the court got from Obama during a State of the Union address till now, he became a cautious old lady more concerned with his reputation in perpetuity than serving the people and the Constitution he swore to uphold.
That, as the WSJ says, is “more corrosive to the rule of law and the Court’s legitimacy” than anything he could have done. He didn’t have the spine to take the heat from a controversial but proper decision so he took the easy way out. He threw away his integrity for popularity and peace. A judicial Chamberlin if you will.
Jacob Sullum at Reason gives you the rest of the bad news:
The Journal notes that the tax power endorsed by Roberts is no less sweeping and dangerous to liberty than the Commerce Clause argument he rejected. "From now on," it says, "Congress can simply regulate interstate commerce by imposing ‘taxes’ whenever someone does or does not do something contrary to its desires." Worse, as I pointed out last week, the tax trick allows Congress to dispense with claims about interstate commerce altogether. As long as a mandate is disguised as a tax (and as long as it does not violate explicit limits on federal power such as those listed in the Bill of Rights), "because we said so" is reason enough.
Mandates “disguised as a tax” give Congress almost limitless power to control your life. That is the power Roberts handed our elected officials.
Oh, but the apologists say, that will never happen. They’d never abuse that power. Yeah, a little lesson in history. When the Constitutional amendment for the income tax was being debated some wanted to put a 2% limit on it. “Don’t do that,” the others said, “it will encourage Congress to immediately go that high.”
And here we are.
The Congress no longer need wrestle with intrusion in your life via the Commerce clause. Justice Roberts just gave them an infinitely easier route that doesn’t require a Constitutional check. He effectively removed the Court from its role in protecting you from increasing government intrusion.
And clever politicians will find a way to use that power he handed them when necessary. Don’t you ever doubt that.
As for Roberts. I have little or no use for a man who sits on the bench of the Supreme Court and puts politics in front of the Constitution he’s sworn to uphold.
These via the Americans for Tax Reform. Says the ATR:
Taxpayers are reminded that the President’s healthcare law is one of the largest tax increases in American history.
Indeed. Tax increases which took place in 2010 after the passage of the bill:
1. Excise Tax on Charitable Hospitals (Min$/immediate): $50,000 per hospital if they fail to meet new "community health assessment needs," "financial assistance," and "billing and collection" rules set by HHS. Bill: PPACA; Page: 1,961-1,971
2. Codification of the “economic substance doctrine” (Tax hike of $4.5 billion). This provision allows the IRS to disallow completely-legal tax deductions and other legal tax-minimizing plans just because the IRS deems that the action lacks “substance” and is merely intended to reduce taxes owed. Bill: Reconciliation Act; Page: 108-113
3. “Black liquor” tax hike (Tax hike of $23.6 billion). This is a tax increase on a type of bio-fuel. Bill: Reconciliation Act; Page: 105
4. Tax on Innovator Drug Companies ($22.2 bil/Jan 2010): $2.3 billion annual tax on the industry imposed relative to share of sales made that year. Bill: PPACA; Page: 1,971-1,980
5. Blue Cross/Blue Shield Tax Hike ($0.4 bil/Jan 2010): The special tax deduction in current law for Blue Cross/Blue Shield companies would only be allowed if 85 percent or more of premium revenues are spent on clinical services. Bill: PPACA; Page: 2,004
6. Tax on Indoor Tanning Services ($2.7 billion/July 1, 2010): New 10 percent excise tax on Americans using indoor tanning salons. Bill: PPACA; Page: 2,397-2,399
By my count $53.4 billion plus that collected in point 1.
7. Medicine Cabinet Tax ($5 bil/Jan 2011): Americans no longer able to use health savings account (HSA), flexible spending account (FSA), or health reimbursement (HRA) pre-tax dollars to purchase non-prescription, over-the-counter medicines (except insulin). Bill: PPACA; Page: 1,957-1,959
8. HSA Withdrawal Tax Hike ($1.4 bil/Jan 2011): Increases additional tax on non-medical early withdrawals from an HSA from 10 to 20 percent, disadvantaging them relative to IRAs and other tax-advantaged accounts, which remain at 10 percent. Bill: PPACA; Page: 1,959
$6.4 billion more ($59.8 billion and counting).
9. Employer Reporting of Insurance on W-2 (Min$/Jan 2012): Preamble to taxing health benefits on individual tax returns. Bill: PPACA; Page: 1,957
No actual number but let’s just say “billions and billions” as the middle class gets taxed for its health benefits. Next year (2013), these kick in:
10. Surtax on Investment Income ($123 billion/Jan. 2013): Creation of a new, 3.8 percent surtax on investment income earned in households making at least $250,000 ($200,000 single). This would result in the following top tax rates on investment income: Bill: Reconciliation Act; Page: 87-93
Also known as a “tax on the rich”. To what effect? Well in 2012 capital gains is taxed at 15%, dividends at 15% and “other” at 35%. If you’re wondering what constitutes “other” here’s how it is defined:
*Other unearned income includes (for surtax purposes) gross income from interest, annuities, royalties, net rents, and passive income in partnerships and Subchapter-S corporations. It does not include municipal bond interest or life insurance proceeds, since those do not add to gross income. It does not include active trade or business income, fair market value sales of ownership in pass-through entities, or distributions from retirement plans. The 3.8% surtax does not apply to non-resident aliens.
In 2013 capital gains will be taxed at 23.8%, dividends at 43.4% and “other” at 43.4%.
11. Hike in Medicare Payroll Tax ($86.8 bil/Jan 2013): Current law and changes. Bill: PPACA, Reconciliation Act; Page: 2000-2003; 87-93
12. Tax on Medical Device Manufacturers ($20 bil/Jan 2013): Medical device manufacturers employ 360,000 people in 6000 plants across the country. This law imposes a new 2.3% excise tax. Exempts items retailing for <$100. Bill: PPACA; Page: 1,980-1,986
13. Raise "Haircut" for Medical Itemized Deduction from 7.5% to 10% of AGI ($15.2 bil/Jan 2013): Currently, those facing high medical expenses are allowed a deduction for medical expenses to the extent that those expenses exceed 7.5 percent of adjusted gross income (AGI). The new provision imposes a threshold of 10 percent of AGI. Waived for 65+ taxpayers in 2013-2016 only. Bill: PPACA; Page: 1,994-1,995
14. Flexible Spending Account Cap – aka “Special Needs Kids Tax” ($13 bil/Jan 2013): Imposes cap on FSAs of $2500 (now unlimited). Indexed to inflation after 2013. There is one group of FSA owners for whom this new cap will be particularly cruel and onerous: parents of special needs children. There are thousands of families with special needs children in the United States, and many of them use FSAs to pay for special needs education. Tuition rates at one leading school that teaches special needs children in Washington, D.C. (National Child Research Center) can easily exceed $14,000 per year. Under tax rules, FSA dollars can be used to pay for this type of special needs education. Bill: PPACA; Page: 2,388-2,389
15. Elimination of tax deduction for employer-provided retirement Rx drug coverage in coordination with Medicare Part D ($4.5 bil/Jan 2013) Bill: PPACA; Page: 1,994
16. $500,000 Annual Executive Compensation Limit for Health Insurance Executives ($0.6 bil/Jan 2013). Bill: PPACA; Page: 1,995-2,000
Your running total through next year? $322.9+ billion in taxes.
And on to 2014:
17. Individual Mandate Excise Tax (Jan 2014): Starting in 2014, anyone not buying “qualifying” health insurance must pay an income surtax according to the higher of the following:
Of course, there are exemptions (Catholics need not apply regardless of what it says):
Exemptions for religious objectors, undocumented immigrants, prisoners, those earning less than the poverty line, members of Indian tribes, and hardship cases (determined by HHS). Bill: PPACA; Page: 317-337
“Undocumented immigrants” get a bye … more of the DREAM Act?
18. Employer Mandate Tax (Jan 2014): If an employer does not offer health coverage, and at least one employee qualifies for a health tax credit, the employer must pay an additional non-deductible tax of $2000 for all full-time employees. Applies to all employers with 50 or more employees. If any employee actually receives coverage through the exchange, the penalty on the employer for that employee rises to $3000. If the employer requires a waiting period to enroll in coverage of 30-60 days, there is a $400 tax per employee ($600 if the period is 60 days or longer). Bill: PPACA; Page: 345-346
Combined score of individual and employer mandate tax penalty: $65 billion/10 years
19. Tax on Health Insurers ($60.1 bil/Jan 2014): Annual tax on the industry imposed relative to health insurance premiums collected that year. Phases in gradually until 2018. Fully-imposed on firms with $50 million in profits. Bill: PPACA; Page: 1,986-1,993
20. Excise Tax on Comprehensive Health Insurance Plans ($32 bil/Jan 2018): Starting in 2018, new 40 percent excise tax on “Cadillac” health insurance plans ($10,200 single/$27,500 family). Higher threshold ($11,500 single/$29,450 family) for early retirees and high-risk professions. CPI +1 percentage point indexed. Bill: PPACA; Page: 1,941-1,956
At this point, we’re very near if not past half a trillion dollars in new taxes.
Never mind the perverse incentives Dale outlines in his post about ObamaCare and the fact that they’ll work very hard to make it one of the largest failures in American history. Imagine the horrific effect these taxes will have on the middle class, on investment, on innovation and, frankly, on the level of care. Not to mention the drain on a very shaky economy (and the possibility of Taxmageddon hitting as well).
This is the pig-in-the-poke a Democratic Congress passed and the Supreme Court upheld yesterday.
Really something to celebrate, isn’t it?
OK, we now have Obamacare. Absent a November election of Mitt Romney and Republican congressional majorities, we’ll simply have to live with it. Except, of course, we won’t, because Obamacare simply will not work. Its design practically ensures that it will meet none of the goals its proponents claim it will meet. The end result will inevitably be more people uninsured, higher costs, greater government spending, and higher debt.
If you want to see how a policy will work, then ignore all the claims made by it’s proponents—and opponents. All that is necessary is to look closely at the incentive structures the law creates. Those incentives will tell you how people will respond to the policy.
So, let’s take a brief look at just a few of the incentives Obamacare creates.
- First, health plans are more highly regulated. They must cover a wide range of preventative procedures, like pediatric or maternity care. This means that stand-alone catastrophic coverage will essentially be a thing of the past. This increases the cost of premiums across the board, and eliminates an entire class of individual insurance coverage.
- At the same time, insurers are forced to cover pre-existing conditions, with premiums limited to 2.5x that of the lower-risk groups. People with chronic conditions, such as diabetes, generally incur costs far in advance of 2.5x that of healthy people—as I well know, being diabetic—and the care for the seriously ill, such as cancer patients, is far higher still. This will, again, raise the costs of premiums overall to recoup the extra costs of insuring the chronically or seriously ill.
- Individuals who do not have have health coverage will be forced to pay what we learned this morning was a tax to the IRS instead. Rational people, then will choose not to buy insurance until their health costs + the penalty is greater than the cost of a health plan.
- Lower income people, with a family income of less than 400% of the poverty level ($88,000 for a family of four) receive a subsidy of varying value, declining with income increases until the 400% of poverty level, at which point it drops to $5,000. At 401% of the poverty level, the subsidy ends. So at that $88,000 level, any increase of income results in the loss of $$5,000. At that point, it is uneconomic to accept any increase in income to less than $93,000, as it will result in a net loss of income, or the family will have to forego medical insurance. This will trap low-wage workers.
- Companies with less than 50 employees that currently provide health coverage to their workers will face a broad range of new costs, mandates, regulations and coverage mandates. They will have to either require more costs to be paid by employees, or simply drop health coverage altogether and simply pay a nominal tax penalty. I suspect many companies will choose the latter, thereby forcing employees to pay for higher-cost individual plans, or forego coverage. Even worse, companies that employ fewer than 50 people have a huge incentive to ensure they never have more than 50 people on the payroll, lest they then be required to provide health insurance, and subject themselves to a much higher administrative burden.
These perverse incentives will result in higher health insurance costs, and an increase in the number of uninsured people. Additionally, the macroeconomic incentives will result in less income growth and lower employment. We will then be told that the "free market" has failed yet again, and be forced to submit to a fully government-run health care system.
Ultimately, Obamacare is nothing more than the latest in "a long train of abuses and usurpations" about which we have done nothing, and will do nothing. I mean, let’s face it, no one is going to call for a new constitutional convention, much less get together with a lusty, gusty group of fellows and head off into the hills with rifles.
But, there’s always a silver lining to every cloud. In this case, it’s that when we default on or monetize our debt and destroy the currency and economy, Obamacare will be irrelevant, as there will barely be enough money for food and shelter, much less expansive health coverage programs.
So, we got that going for us.
Apparently the entire law has been upheld with Chief Justice John Roberts joining the liberal side of the court to declare the individual mandate survives as a tax. The political elite have once again wiped their collective rear ends with the Constitution.
You are now all destined to be required by law to purchase (via “tax”) whatever in the hell Congress decides it wants you to purchase. And this will, of course, translate into doing whatever Congress decides you need to do (again, I’m sure the clever totalitarians among us will find some way to accomplish those things through “taxation”).
Welcome to the new “America”.
Wait … didn’t we once revolt over unfair taxation?
UPDATE: Apparently CNN is reporting the mandate was struck down. SCOTUS blog says:
The court reinforces that individuals can simply refuse to pay the tax and not comply with the mandate.
CNN just corrected their previous release and said the entire ACA had been upheld (and they wonder why they’re losing viewers?).
The Court holds that the mandate violates the Commerce Clause, but that doesn’t matter b/c there are five votes for the mandate to be constitutional under the taxing power.
In Plain English: The Affordable Care Act, including its individual mandate that virtually all Americans buy health insurance, is constitutional. There were not five votes to uphold it on the ground that Congress could use its power to regulate commerce between the states to require everyone to buy health insurance. However, five Justices agreed that the penalty that someone must pay if he refuses to buy insurance is a kind of tax that Congress can impose using its taxing power. That is all that matters. Because the mandate survives, the Court did not need to decide what other parts of the statute were constitutional, except for a provision that required states to comply with new eligibility requirements for Medicaid or risk losing their funding. On that question, the Court held that the provision is constitutional as long as states would only lose new funds if they didn’t comply with the new requirements, rather than all of their funding.
Just marvelous. Thanks Justice Roberts. </sarc>
SCOTUS opinion/decision here.
Me, I’m taking the rest of the day off. As an old libertarian I mourn for the freedom we just lost. It is another reason, in a long, long line of them, to clean that cesspool of Washington DC out. And, frankly, perhaps it is time we contemplated bolder measures.
Sorry … but this ruling all but guarantees the twilight of a great experiment. It lasted over 200 years, but it is definitely in its nadir now. This only accelerates the decline. We’ve just put ourselves in the same place as Europe, and we see who gloriously that’s going, don’t we?
Wow, just wow.