By Robert L. Ehrlich Jr.
8:00 AM EST, December 30, 2012
It's difficult to catalogue all the negative impacts of Obamacare in one place. Nevertheless, my readers deserve to know a few of the uglier details as the new year rings in one of the most expensive, convoluted policy experiments in American history.
•Lost in the hysteria surrounding Obamacare's 20 new tax increases is the law's surcharge of 0.9 percent on wages and salaries and 3.8 percent on investment income. This is another levy directed at small business owners. You know — the ones who are supposed to ramp up hiring to spark our economic recovery. A reminder: Obamacare's taxes are estimated to raise in excess of $500 billion over the next 10 years.
•Next year, the federal government will fine every American who fails to purchase a "Minimum Essential" level of health coverage. One Congressional estimate found that as many as 16,500 additional IRS agents will be needed to enforce this mandate. FYI: The services to be included in the ME packages will not be decided by consumers through the health care market but by federal regulators through rule making.
•Obamacare mandates a $2,000-per-employee fine for those employers (with 50 or more employees) who find it unaffordable to continue their employer-sponsored health plans. Employees of these firms will be steered into the state-run exchanges. But no worry. Generous subsidies will be provided to those making up to $88,200 a year. What a classic Obama-ite plan: Isolate the employee from the real cost of health insurance; expand government dependence deeper into the middle class; and send the tab to the federal taxpayer.
•A chilling Christmas season headline from The Daily Caller: "Will Obamacare Drive Little Sisters of the Poor Out of the U.S.?" Answer: quite possibly. Obamacare's frontal attack on the conscience clause requires employers who hire without regard to religious affiliation to offer insurance services (sterilization, abortion, contraception) they find objectionable. Dropping coverage is not an attractive option; recall the aforementioned $2,000-per-employee fine due the federal government. Accordingly, the Sisters are forced to choose between their religious convictions and serving the aged and infirm.
•A new 2.3 percent tax on medical devices (implants, prosthetics, pacemakers, stents, etc.) remains one of the most unpopular items in the Obamacare tax inventory. This is the last sector of our economy that should be singled out for punitive treatment, as these are the inventions that extend and improve our quality of life. Even worse, the tax will be collected against gross revenues, regardless of whether the manufacturer generates a profit. The industry association representing device makers estimates that 43,000 jobs will be lost thanks to this new tax. A further insult: Many of the lost jobs will be moved overseas. A repeal effort in the current Congress garnered 36 Democratic votes. And two weeks ago, 17 Democratic senators and senators-elect requested a delayed effective date. Let's hope this bad idea gets jettisoned during fiscal cliff negotiations.
•Medicare Advantage covers a quarter of all seniors with privately managed plans. The program is well regarded in senior America, but Obamacare cuts MA reimbursements by $145 billion. A likely result: Many seniors will return to traditional Medicare at reduced benefits and additional expense. How ironic that the most adversely impacted groups will be lower-income black and Hispanic seniors who like one of the government's best-run programs. (I wonder how many of these seniors remember the president's pledge that Obamacare would not require anyone to give up or change his existing health care coverage?)
•Obamacare is a budget buster of biblical proportions. The nonpartisan Congressional Budget Office initially estimated its cost at $938 billion. The latest CBO projection is $1.93 trillion. Further, millions of Americans will be added to a Medicaid program that has been driving state budget deficits for years. Obamacare's bottom line is to provide hugely expensive new subsidies for health care coverage while drastically increasing the federal government's power over the way medical services are offered and delivered.
In 2008, then-Senator Barack Obama stated that "if I were starting from scratch, if we didn't have a system in which employers had typically provided health care, I would probably go with a single-payer system." A Democratic Congress refused to follow suit, but Obamacare's 159 new agencies, boards and commissions represent a significant step down a socialized, government-sponsored path.
Obamacare is designed to make our federal government the primary determinant of health care quality and quantity, but it doesn't end there. A new, unaffordable federal entitlement is born. Individual freedom of choice ebbs away. Another step toward a European-style delivery system is accomplished. Not a healthy day for American consumers.
Robert L. Ehrlich Jr.'s column appears Sundays. The former Maryland governor and nember of Congress is a partner at the law firm King & Spalding and the author of "Turn this Car Around," a book about national politics. His email is email@example.com.
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