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Jewish World Review
December 18, 2012/ 5 Teves, 5773
Get ready for the costs and chaos of Obamacare
House Speaker Nancy Pelosi was widely mocked when she said of Obamacare, "We have to pass the bill so that you can find out what is in it." At the time, March 2010, Pelosi's words accurately described the Democrats' just-get-it-done approach to passing a national health care bill. But now it turns out Pelosi was wrong. In fact, we have to implement Obamacare so that you can find out what is in it.
Amid the other momentous events coming in 2013 -- bitter fights over federal spending, debt, entitlements and immigration -- the biggest story of the year, and of 2014 as well, will be the arrival of Obamacare in the lives of every American.
For millions of people, Obamacare will mean, alone or in some combination: higher insurance bills, unwanted changes in status at work, higher taxes, loss of employer-based health insurance and a bewildering bureaucracy that will make today's already complex insurance maze seem downright simple.
Whether Obamacare's benefits will outweigh the chaos it produces could decide the future of the program.
Start with higher insurance bills. "The big unwritten story is that for people who already have insurance through the individual market, or small companies that are buying products in the state-regulated small group market -- those current policies are going to see premium increases on the order of 25 percent to 30 percent come Jan. 1, 2014," says James Capretta, a health care expert and close student of Obamacare at the conservative Ethics and Public Policy Center. "They are going to have a rate shock like you wouldn't believe."
The reason is that those people are generally younger and healthier and are able to get lower rates. Under Obamacare, they will be combined with older and less healthy people who cost more to insure. Capretta says about 30 million people will see a steep increase -- a population big enough to make a lot of political noise.
Then there is the change in work status. Under Obamacare, companies don't have to insure, or pay fines for not insuring, employees who work less than 30 hours a week. So it's no surprise that many companies are going to make sure their part-time workers, and some current full-time workers, stay below the 30-hour limit. That will mean less work and less pay for those employees.
Then there are the unexpected costs. This week, the Department of Health and Human Services revealed it will charge employer and individual plans a $63 "fee" for every person they cover. The Obama administration says the fee will be temporary, but it could touch about 190 million Americans at least for the next few years.
Then there are higher taxes. Apart from the "fiscal cliff" debate over whether to raise taxes on higher earners is the fact that Obamacare will, in fact, raise taxes on those same higher earners. On Jan. 1, the top brackets will face higher Medicare taxes plus a substantial tax increase on their investment income.
But it's not just the higher earners. An estimated 10 million tax filers take a deduction for unusually high medical expenses. Under Obamacare, that deduction will be limited, meaning they will pay more. Most of them fall far below the administration's definition of "wealthy."
There are also new taxes on business. Recently, several Democratic senators -- all of whom voted for Obamacare -- asked that one of its funding mechanisms, a 2.3 percent tax on medical devices, be postponed. Sounding remarkably like a Republican, Sen. Al Franken, whose home state of Minnesota is headquarters of device-maker Medtronic, called it a "job-killing tax."
Then there is the loss of employer-based insurance. Obamacare is designed to kill employer-based insurance by making it attractive for employers to dump workers into exchanges, which may or may not be ready in time. (Nearly two dozen states have refused to set up exchanges on their own, which will force the federal government to do it for them.) "I think companies will wait and see how the exchanges play out," says Capretta. "But within a year or two, there will be some serious looking to see if there is an opportunity to offload some costs."
Finally, there is Medicaid. Much of Obamacare is based on adding millions of Americans to that program for the poor. But the Supreme Court decision upholding the health care law also ruled that states, which pay for part of Medicaid, don't have to go along. Some states have already said they won't, which could lead to enormous controversy and expensive solutions as the administration struggles to provide coverage to those affected.
Together, all of this could equal one big mess. And if it is a big enough mess, it could have a significant, and decidedly negative, political effect on the Democrats who passed Obamacare and who will now put it into practice.
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