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Buyer's Remorse: What to Expect Under Health Care 'Reform'

Health Care Reform
Photo by Dolphie

Over the past year, Congress conducted an extensive debate on health care reform. No one will argue that we do not need health care reform, and I was proud to support meaningful alternatives that unfortunately never received hearings or debate in the House. While I believe the legislative and debate process used to pass this health care reform package was flawed, it is now time to review what lies ahead for Americans and our nation’s health care system.

On March 23rd, President Obama signed the health care reform package into law with a total estimated cost of $2.3 trillion, financed by over $500 billion in tax hikes and fees. A majority of these tax hikes will come in the form of increases on payroll and unearned income taxes for Americans. These tax hikes, levied during one of the most trying times for our nation’s economy, will only delay our recover and slow long-term economic growth. In addition to these taxes, Americans will see indirect taxes on medical devices, pharmaceuticals, and through their health insurance plans over the next seven years.

The law mandates employers provide health insurance, or pay a penalty for not providing health insurance deemed “sufficient” by the government, or both in certain cases. Small businesses will be especially hard hit under this plan. Only certain small businesses, those with fewer than 25 employees, will receive a credit for providing health insurance – keeping in mind that the “full” credit for small businesses with ten employees or less is only 50 percent of total costs. The non-partisan Congressional Budget Office (CBO) estimates that only 12 percent of all small businesses nationwide will receive the full or partial credit. This credit will be eliminated in 2016, only two years after full implementation of this law, leaving small businesses worse off than prior to enactment. Non-compliance with these rules will result in civil and or criminal penalties against individuals and employers, enforced through the IRS. The CBO stated in their review of this legislation that the costs associated with the employer mandate will be shifted directly to workers in the form of lower wages and reduced or eliminated positions and hours.

Senior citizens will also see direct and devastating effects under this new law, which contains $529 billion in cuts to Medicare. These cuts will be used to finance the expansion of Medicaid and a new entitlement program financed by the Federal government, essentially robbing Peter to pay Paul. In addition to these cuts, Medicare Advantage will be cut by $120 billion, affecting 11 million senior citizens and cause an estimated 33 percent decline in enrollment.

This new law also contains controversial language that will allow the federal funding of abortions, a break from the long-standing policy of the Hyde Amendment, which was enacted in 1976. Many lawmakers who consider themselves “pro-life” voted in favor of this legislation after a promise from President Obama to sign an Executive Order to correct the problem of abortion funding in the bill. Unfortunately, an Executive Order cannot change federal statute, after being signed into law. Other Members of Congress have admitted that an Executive Order cannot change federal statute, and can be retracted just as easily because it does not have the full force of law. The American public, including my constituents, have overwhelmingly indicated that they do not want the government to fund abortions, but that is exactly what this legislation will do.

Our nation’s current fiscal situation is in no condition to take on an additional $2.3 trillion in costs associated with this law. History shows that when the federal government enacts entitlement programs, cost estimates are almost always underestimated. When Medicare was enacted in 1967, the original cost of the program was estimated to be $12 billion by 1990. Actual Medicare spending in 1990 was $111 billion, more than nine-times the original estimate. Some research and studies have shown that Medicare could go broke by 2017 and our other large entitlement program, Social Security, could go into the red by 2016. With the $76 trillion in unfunded liabilities we currently face, a national debt over $12 trillion, and trillion dollar deficits projected for upcoming years, we simply cannot afford this legislation.

 

Photo by Dolfi.