Cole: True Costs of Obamacare Come to Light
True Costs of Obamacare Come to Light
One of the first questions reporters asked House Republicans when we unveiled our “Path to Prosperity” budget plan is “Why does the plan repeal Obamacare?” The answer is simple: Obamacare is an economic disaster.
The president’s health care law will not be fully implemented until 2014, and it is already causing increased premiums, higher taxes and reduced employment. It’s no coincidence that a law jammed through Congress on a party-line vote in 2010 does not take effect until two years after the 2012 presidential election. While then- House Speaker Nancy Pelosi announced that Congress would have to pass Obamacare to “find out what is in it,” members of the Obama administration already knew that familiarity with the law would only increase its unpopularity. The law was designed to postpone until this year headlines like “Fed: Obama’s Health Law Leading To Layoffs” (The Hill, March 6), “Insurers’ 2014 Hikes Already Taking Toll” (Politico, January 11), “Employers Blast Fees From New Health Law” (The Wall Street Journal, March 14), and “Federal Rule Limits Aid To Families Who Can’t Afford Employers’ Health Coverage” (The New York Times, January 30).
According to a new report from the Joint Committee on Taxation, Obamacare creates 21 separate new taxes costing individuals and employers $1 trillion. The law will also waste time — generating 40 million hours’ worth of paperwork as families and businesses attempt to comply with a myriad of complicated regulations.
The taxes and fees are already creating a drag on the economy. Survey after survey shows that business owners are delaying or avoiding hiring new workers because of the punishing extra costs. According to a report from the Federal Reserve, “Employers in several Districts cited the unknown effects of the Affordable Care Act as reasons for planned layoffs and reluctance to hire more staff.” The tax on medical devices has already cost 6,000 jobs in that field and could endanger 43,000 more, according to industry sources. Major employers only recently discovered a provision requiring them to pay a $63 fee for each employee they insure. For a large company like Boeing, which spends $2.5 billion per year to insure 405,000 workers and their dependents, the fee will create a staggering $25 million cost in 2014 – a clear disincentive to hire. Individual workers will be charged new fees, as well. Beginning in 2014, Americans who purchase insurance either through their employer or on their own will be required to pay a “user fee” totaling 3.5 percent of the monthly premium to support the new government-run health care exchanges. Analysts initially believed that the fee would apply only to plans purchased through the exchange, but a recent administration announcement breaks the news that there’s no way to avoid paying for Obamacare.
In addition to hidden fees, insurance consumers will have less money in their pockets due to increased premiums. As Politico puts it, “All those new consumer benefits packed into the health reform law — birth control without a co-pay, free preventive care and limits on when insurers can turn down a customer — had to be paid for somehow.” To the surprise of no one residing in the real world, that “somehow” is double-digit premium increases. Insurance companies are passing their $8 billion in new 2014 taxes – set to increase to $14 billion within four years—on to their customers. Since many 2013 plans extend to 2014, the premium increases are starting now.
Conservative opposition to Obamacare is not based on partisan disagreement or even solely on a basic philosophical objection to expanding government control over individual lives. The president’s health care law is bad for job creation and bad for family bank accounts. Repealing it before it can do more economic damage is a basic budgeting obligation.