The fundamental flaw of “ObamaCare” is that it entitles tens of millions of people to get care from an unreformed system with costs rising at unsustainable rates. http://www.obamacarewatch.org/

Health law’s heavy impact

Paul Guppy Special to The Spokesman-Review Close [X]

In the days leading up to the dramatic late-night vote on President Barack Obama’s health plan, Speaker Nancy Pelosi said, “We have to pass the bill so that you can find out what is in it …” Now that ObamaCare has passed, it is slowly dawning on people what the new law means for the country and for Washington state.

ObamaCare sweeps away a host of state regulations and permanently alters our state’s insurance market. From now on, the federal government will manage the health care of all Washingtonians. The 2,700-page law contains a complex web of mandates, directives, price controls, tax increases and subsidies.

Federal officials will now decide what kind of insurance people in Washington must have, what medicines will be covered, what treatments are allowed and which are not. Early reports indicate, however, that President Obama, Vice President Biden, the Cabinet, Senior members of Congress, leadership staff, some States and Cadillac Health Plans (Unions) are exempt.

The new law falls well short of universal coverage. ObamaCare will leave about 6 percent of Washington residents without coverage. The measure is conservatively expected to cost $2.4 trillion in its first full decade. Thousands of older Washingtonians will lose their Medicare Advantage coverage, and the state’s 120,000 Health Savings Account holders may need to buy new policies or face stiff penalties.

Washington residents will begin paying ObamaCare taxes this year 2010, while most benefits don’t start until 2014. The law includes some 19 new taxes. Here’s a rundown of what Washingtonians can expect in the coming years.

Penalties on individuals. Individuals will pay a yearly penalty of $695, or up to 2.5 percent of their annual income, if they cannot show they have purchased a government-approved health policy.

Penalties on families. Families will pay a yearly penalty of $347 per child, up to $2,250 per family, if parents cannot show they have purchased a government- approved policy.

Penalties on employers. Business owners with more than 50 employees must buy government- acceptable health coverage or pay a yearly penalty of $2,000 per employee if at least one employee receives a tax credit.

Tax on investment income. ObamaCare imposes a 3.8 percent annual tax on investment income of individuals making $200,000 or more and on families making $250,000 or more. The new tax is not indexed to inflation, so more people will fall under it each year. Seniors on fixed incomes and people with IRAs and 401(k) plans will be hit particularly hard.

Tax on “Cadillac” health plans. Starting in 2018, imposes a 40 percent annual tax on health care plans valued at $10,200 for individuals and $27,500 for families.

Medicare tax increase. Requires single people earning $200,000 or more and couples earning $250,000 or more to pay an additional 0.9 percent in Medicare taxes.

Tax on Home Sales. Imposes a 3.8 percent tax on home sales and other real estate transactions. Middle-income people must pay the full tax even if they are “rich” for only one day – the day they sell their house and buy a new one.

Tax on medical aid devices. Creates a new 2.9 percent tax on medical aid devices. Certain items intended for personal use are exempt.

Tax on tanning. Imposes a 10 percent tax on services at tanning salons. Business owners will collect the tax from customers and send it to the federal government. This appears to be the first federal sales tax in the United States.

ObamaCare will be enforced by the Internal Revenue Service. The tax agency plans to hire 16,500 new auditors, agents and investigators, and to increase enforcement audits. The IRS can confiscate tax refunds, place liens on property and seek jail time if health-related penalties and taxes are not paid.

President Obama had said people could keep their coverage if they want, yet the Congressional Budget Office estimates that under ObamaCare 8 million to 9 million people will lose their employer-provided coverage.

The ObamaCare law passed over bipartisan opposition in Congress. Republicans say they will run on a “repeal and replace” platform this fall, and Washington has joined 12 other states in a lawsuit challenging the federal government’s power to force state residents to buy a product – insurance – from private companies. The long-term prospects of ObamaCare are unclear. In the meantime, Washingtonians should prepare for major changes in their tax burden.

Paul Guppy is vice president for research at the Washington Policy Center, a research organization with offices in Spokane, Seattle, Olympia and the Tri-Cities

Obama Dares Republicans to Run on Repealing Health Care

Updated: Thursday, 25 Mar 2010, 12:59 PM MDT
(NewsCore) - President Obama hit the road Thursday to sell his new health care reform law in the state that started him on his path to the presidency and dared Republicans to run against the law in the 2010 Midterm elections.

In an afternoon speech at the University of Iowa in Iowa City, the president thanked Iowa for giving him victory in the 2008 Iowa caucuses, saying “this is the place where change began.”

Obama went on the political offensive, daring Republicans to run in November on a platform of repealing the health care reform that he signed into law Tuesday.

“They’re [Republicans] actually going to run on a platform of repeal in November. And my attitude is go for it!,” the president declared to rapturous applause from the audience.

The president jostled his Republican critics for what he perceived to be over-the-top, scaremongering language.

“They call it Armageddon, the end of freedom as we know it,” Obama said. “After I signed the bill, I looked around to see if there were any asteroids falling, some cracks opening up in the earth. Turned out it was a nice day,” Obama quipped.

While admitting that the law was not perfect, Obama declared that the law was a big positive step for the American people.

“The days of the insurance industry riding roughshod over the American people are over,” he declared.

The president also stressed that Americans needed to be patient, saying that it would take four years to implement his plan and that Americans would not see their health care costs go down overnight.

The president also reiterated some of his standard lines from the past few days, reaffirming that Americans would be able keep their current doctors, and detailed detailing how the law was pro-jobs and pro-business and would be a boon to small businesses across the country.

Healthcare suits:

South Carolina, Nebraska, Texas, Utah, Louisiana, Alabama, Colorado, Michigan, Pennsylvania, Washington, Idaho, and South Dakota, Florida, Indiana, North Dakota, Mississippi, Nevada and Arizona .

Political Map:

Democratic

Republican

Swing

Texas to Challenge Federal Health Care Reform

Attorney General Greg Abbott

Reference Material

If health care reform does indeed pass tonight, Texas will fight it in court.

Late Saturday night, as the political world braced for a frantic Sunday that is expected to culminate in a long-awaited vote on health care reform legisation, Texas Attorney General Greg Abbott posted the following to his Facebook page:

We are fully engaged in the legal challenge to the healthcare bill. On Thursday we had a strategy call with other AGs, and today we briefed Texas congressional members who share our concerns with this bill. Texas will be undoubtedly challenge this constitutionally questionable law--it's just a question of whether to file our own lawsuit or join a multistate effort.

According to the Associated Press, 37 states have pending legislation similar to a bill that was recently signed into law in Idaho, which would trigger a lawsuit against the federal government if a bill passes requiring residents to buy health insurance. The number of states that ultimately challenge the bill in court will likely be more comparable to the 14 (including Texas), that — along with American Samoa — sent a letter to the Democratic leadership in Washington, D.C., in January threatening legal action if a provision giving Nebraska a break on expanding Medicaid costs remained in the final version of the bill. That specific provision is expected to be removed from the bill, but a copy of that letter with the names of the attorneys general who were ready to go to court over it is available to your right.

"General Abbott has monitored developments throughout the day," says Daniel Hodge, Abbott's chief of staff. "We are currently working to help organize a strategy call tonight so that General Abbott and his fellow attorneys general can discuss the states’ legal challenge to the federal healthcare bill."

UPDATE: Those who bet on a group effort were right. After a conference call with over a dozen states, Abbott posted the following update on Facebook:

“Just got off the AG conference call. We agreed that a multi-state lawsuit would send the strongest signal. We plan to file the moment Obama signs the bill. I anticipate him signing it tomorrow. Check back for an update at that time. I will post a link to the lawsuit when it is filed. It will lay out why the bill is unconstitutional and tramples individual and states’ rights.”

Here is the statement Abbott released after healthcare passed:

"The federal health care legislation passed tonight violates the United States Constitution and unconstitutionally infringes upon Texans' individual liberties. To protect all Texans' constitutional rights, preserve the constitutional framework intended by our nation's founders, and defend our state from further infringement by the federal government, the State of Texas and other states will legally challenge the federal health care legislation."

Health Care Primer: An Introduction

For the links in blue, see http://obamacarewatch.org/primer

Foundational Documents

What is ObamaCare? Given its complexity and reach, the recently enacted health care law almost seems to defy summarization and comprehension.

And it is of course true that the new legislation is filled with scores of detailed prescriptions touching nearly every corner of American health care. The implications of most of these provisions will only be fully understood if and when they are made operational.

Even so, it is not necessary to describe every section and subsection of the law to understand the core and flawed logic of the broad ObamaCare project.

Fundamentally, ObamaCare is built around a small number of key changes in the way health insurance is arranged for working age Americans and their families.

Today's employer-based system of insurance works well for the vast majority of working age people and their families, but it leaves gaps for some because the insurance is not portable, small employers have a more difficult time securing stable options, and low-wage workers sometimes cannot afford the premiums because costs are high relative to their incomes and rising rapidly.

Instead of attacking the primary problems -- lack of portable insurance and costs driven upward by excessive federal subsidization -- ObamaCare leaves the flawed policies in place and attempts to coerce coverage of the remaining uninsured with a heavy-handed governmental structure. This structure is said to be targeted in a way that helps those without coverage without disrupting everything else. But that is not true. Once in place, the key ObamaCare reforms will inevitably put the federal government in the driver’s seat over the basic direction of all American health care.

The key provisions are as follows.

The Individual Mandate and Federal Regulation of Health Insurance: For the first time, the federal government is going to impose a requirement on citizens and legal residents to purchase a product in the private economy, namely government-approved health insurance. The government would establish what constitutes an appropriate insurance policy, and heavily regulate the premiums that can be charged. Insurers would have to take all comers without regard to their health risks.

Medicaid: Medicaid is expanded to cover everyone in households with incomes below 133 percent of the federal poverty line. The Congressional Budget Office expects this expansion will add 16 million people to Medicaid at a cost of nearly $100 billion per year by 2019.

State-Based "Exchanges" and Premium Subsidies: States are expected to stand up new "exchanges" through which individuals and workers in smaller firms would get their insurance. Larger employers could choose to let their workers get their insurance there as well instead of through them. The federal government would subsidize the premiums of those with incomes between 133 and 400 percent of the federal poverty line.

The Employer Mandate: Employers with at least 50 employees would pay taxes if any of their workers ended up in subsidized insurance through the exchanges.

These provisions would interact with each other in ways that would be disastrous economically, budgetarily, and for the quality of American health care.

o The legislation will destroy jobs, especially for workers from low income households. Employer not offering health coverage would pay no penalty if their workers were ineligible for subsidization in the exchanges. But they would pay $3000 annually for every worker who is eligible for a subsidy. These penalties will depress hiring of those workers most in need of jobs.

o It will send federal entitlement costs soaring. The added costs to the federal budget from the Medicaid expansion and premium subsidies would be enormous, reaching $214 billion in 2019, and rising at a rate of about 8 percent every year thereafter, according to CBO.

o It will undermine existing insurance arrangements, including employer plans. The lure of generous new insurance subsidies in the exchanges could lead to many employers to choose to dump their coverage altogether. Indeed, many millions of low and moderate wage workers would get thousands of dollars in additional federal assistance – beyond the tax benefit from job-based insurance they have today -- if they got their insurance through the exchanges instead of through their jobs. The stampede of workers into the exchanges will make federal costs soar.

o It will lead to arbitrary government price controls in health care that will reduce the quality of care and drive out willing suppliers, leading to crowded waiting rooms, queues, and difficulty in accessing care. With ObamaCare, the government has imposed on its citizens the requirement to get health insurance. That will lead inevitably to the government taking on the responsibility for “cost control.” But the only way the government knows how to control costs is with price setting. That’s the primary way the new law cuts Medicare, with deeper and arbitrary payment cuts for hospital and other institutional providers. The CMS actuary expects these cuts will lead to access problems for Medicare beneficiaries, as at least fifteen percent of the institutions would be thrown into insolvency from the cuts. As time goes on and costs soar, the federal government would almost certainly extend its price setting reach beyond Medicare. That’s what most other countries with heavy governmental system do. And the result is a predictable deterioration in the responsiveness of those systems to patients with difficult and expensive conditions.

The fundamental flaw of ObamaCare is that it entitles tens of millions of people to get care from an unreformed system with costs rising at unsustainable rates. That will lead inevitably to pressure for even greater federal control over costs. And the federal government has demonstrated no capacity to control costs without harming quality for everyone.