A new analysis of “Obamacare,” as President Obama’s plan effectively nationalizing health care has been dubbed, concludes the law will hit American households for more than $17 billion a year with just one of its “disasters,” and the real overall cost likely will be $2.5 trillion, nearly triple the $940 billion estimate from the Congressional Budget Office.
According to the Heritage Foundation, the nation’s most broadly supported public policy research institute, a single $17 billion-plus hit on American’s wallets will come from a tax increase on anyone with investment income, the result of dollars being invested in creating new products, services and jobs.
Heritage Foundation analysts Karen Campbell and Guinevere Nell found the tax, at Obama’s proposed rate of 2.9 percent, would reduce household disposable income by $17.3 billion a year, the analysis said.
The rate included in the new law is 3.8 percent, so “the actual effects are likely to be even more dramatic,” the report warned.
The analysis examined the “Patients Protection and Affordability Act,” passed by the House March 21, the sidecar reconciliation bill that originated in the House.
The two, the analysis said, “will have major ramifications for every man, woman and child in the United States.”
“Between these two bills are countless provisions that grow federal spending, increase burdensome taxes, and put federal rules and regulations between Americans and control over their health care,” the report said.
Many such analyses are just now being published, since much of the law wasn’t available for review until shortly before the votes, and lawmakers themselves admitted they didn’t know all of its contents.
The analysis concluded the estimate from the Congressional Budget Office that the plan will cost $940 billion from 2010 to 2019 is just plain wrong.
“The authors of this legislation took advantage … in crafting the language of the bill, employing several budgetary gimmicks to make it appear cheaper,” the report said.
“These include omitting cuts to Medicare provider payment rates, known as the ‘doc fix,’ double-counting savings from Medicare and the CLASS Act, indexing benefits to general inflation rather than medical inflation, and delaying the expensive provisions of the bill.
“When these costs are accounted for, the new law is more likely to cost closer to $2.5 trillion,” the report said. “Such levels of spending will not only negate any projected deficit reduction but increase the federal deficit further than would prior law.”
The report also warned that efforts to address the cost of health care only address the symptoms of price hikes, and growth will be stymied by government fines for employees not covered by “adequate” policies.
Further, the government now not only will “define a required benefits package” but will “dictate the prices that insurers set.”
“The bill also opens the door for a de facto public option by creating government-sponsored national health plans to compete against private health plans in the health insurance exchanges the states are required to establish,” the report said.
It also extends Medicaid, a financially unsuccessful government plan, to “all Americans who fall below 133 percent of the federal poverty level.”
“According to CBO, of the 32 million newly insured in 2019, half will receive their coverage from Medicaid,” the report said.
“As it stands, Medicaid is a low-quality, poorly functioning program that fails to meet the needs of the Americans it serves. In most states, Medicaid beneficiaries have great difficulty finding a doctor who will treat them at the program’s low reimbursement rates and are more likely than the uninsured to rely on emergency rooms for care,” it said.
Other problems “Obamacare” presents include dumping huge new financial obligations on states that cannot balance their budgets – with costs estimated at almost $10 billion; failing to address the expected 2016 insolvency of Medicare; and creating an inequity among Americans for insurance programs actually available.
The Heritage analysis also concludes a major element of the law is unconstitutional.
“The new law requires all Americans to purchase health insurance or pay a penalty. This represents an unprecedented extension of congressional power – never before has the federal government required Americans to purchase a good or service as stipulation of being a lawful citizen,” the analysis said.
The structure of fines also creates an incentive for employers to avoid hiring workers from low-income families, “hurting those who need jobs the most.”
“These disasters are only the beginning of the vast effects the president’s health-care overhaul will have on the U.S.,” the report warned in its conclusion.