President Obama has repeatedly asserted that the new health care reform’s individual mandate requiring everyone to have qualified health insurance coverage or pay a penalty is not a tax.  And yet the Department of Justice (DOJ) now claims the mandate is a tax, but not because the legislation refers to the mandate as a tax — it doesn’t.   Rather, the DOJ lawyers want the Supreme Court to confer its blessings on ObamaCare when the issue comes before the Court, and the lawyers are increasingly concerned that the 20-plus state challenge claiming the mandate is unconstitutional may hold up, says Merrill Matthews, a resident scholar with the Institute for Policy Innovation. 

The Democratic defense has morphed from the: “Of course we have the constitutional power to impose an individual mandate” defense to, “The Commerce Clause gives us the power to mandate coverage” defense, and now to their, “It’s a tax” defense.  

Many conservatives rejoiced at the flip-flop, proclaiming they have caught the president and his administration in one more broken promise: not to raise taxes on families making less than $250,000 a year.  If the mandate really is a tax, it could be the largest in history — and it affects everyone, says Matthews: 

• A Kaiser Family Foundation survey of employers last year found that average premiums for an employer-provided family policy, which is more likely to be the type of comprehensive coverage required by ObamaCare, was $13,375, about 25 percent of the median household income of $52,000.
• That $13,375 family policy costs the same for both lower- and higher-income workers; so if the mandate is a tax, it’s equivalent to a 50 percent income tax on a family making $25,000 a year but a 10 percent income tax on a family making $130,000 a year. Talk about regressive taxes! 

Of course, the Obama administration will argue that it is addressing the regressivity problem by providing a sliding scale subsidy, up to 400 percent of the federal poverty level (about $88,000 for a family of four in 2010), to insulate lower- and middle-income families.   But subsidies don’t negate the fact that ObamaCare imposes the tax on every individual in the country.  It simply means that someone else — i.e., either employers or other taxpayers — will be paying the tax for millions of Americans, says Matthews. 

Source:  Merrill Matthews, “The Biggest Tax Increase in U.S. History?” Forbes, July 26, 2010. 

For text:

http://www.forbes.com/2010/07/26/health-care-mandate-barack-obama-opinions-contributors-merrill-matthews.html

"This is Going to Hurt A Little..."

(Editor’s Note:  What right-wing conservative talk show host, candidate or political figure said this?  None of the above.  It is a quote from the Congressional Budget Office from 1994 (under the Clinton administration)!   This statement is no less dead-on right today than it was then.)

“The new federal health-care law has raised the stakes for hospitals and schools already scrambling to train more doctors.

Experts warn there won’t be enough doctors to treat the millions of people newly insured under the law. At current graduation and training rates, the nation could face a shortage of as many as 150,000 doctors in the next 15 years, according to the Association of American Medical Colleges.

A shortage of primary-care and other physicians could mean more-limited access to health care and longer wait times for patients.”   (WSJ, 4.13.10)

(Editor’s note: Here’s yet another case in point (surprise-surprise) of what happens when the government intrudes on a complex, multi-layered private industry and attempts to “improve” its efficiency by taaking it over.)

James Carville’s words are as true now as they were in 1992. Last week, the Bureau of Labor Statistics reported unemployment was higher in 27 states in February. The national unemployment rate is now at 9.7, up from 8.2 percent a year earlier. Since last year alone, the economy has shed another 3.2 million jobs-all while the President and Democrats on Capitol Hill focused on the virtues of legislation that increases premiums and raises taxes.  There’s not an economist in the whole world who believes a government should raise taxes during a deep recession. 

Unfortunately, that’s exactly what the White House is doing.  This new “cost-reducing” law:

• Increases Deficits. At $12 trillion, the U.S. debt is the largest it’s ever been-and growing at an astonishing pace. At $940 billion, government-run health care will not only increase the debt, but the rate at which the debt grows.

• Reduces Quality. It waters-down the Medicare coverage of 33 million Americans and renders 20% of U.S. hospitals unprofitable because of Medicaid spending cuts. Worse, it encourages employers to cease employer-provided insurance and instead push millions of Americans into poorly administered Medicaid-like plans.

• Increases Cost. It raises taxes by $569.2 billion, steals roughly $500 billion from Medicare and robs another $52 billion from Social Security. It increases premiums for individual insurance by 54% and family premiums by $2,100.

• Limits Access. It will push an estimated 19 million Americans off their employer-based plan and 11.5 million off Medicare Advantage. It provides 32 million Americans access to doctors, but fails to appropriate any funds for new doctors and hospitals and, even worse, systematically underpays medical providers.

Jeanette Nordstrom
National Center for Policy Analysis
www.ncpa.org

Natural experiments are rare in politics, but few are as instructive as the prototype for ObamaCare that Massachusetts set in motion in 2006.  The bills for “universal coverage” are now coming due, and it appears the state political class is prepared to do lasting damage to one of America’s top-flight health care systems, says the Wall Street Journal. 

Last month, Democratic Governor Deval Patrick proposed hard price controls across almost all Massachusetts health care: 

• State regulators already have the power to cap insurance premiums, which Patrick is activating.
• He also filed a bill that would give state regulators the power to review the rates of hospitals, physician groups and some specialty providers.
• Those that are deemed too high “shall be presumptively disapproved.” 

The administered prices of Medicare and Medicaid already shift costs to private patients while below-cost reimbursement creates balance-sheet havoc among providers.  Now the governor wants to import these distortions to save the state’s heavily subsidized insurance program as costs explode, says the Journal. 

Ironically, former Governor Mitt Romney (like President Obama) sold this plan as a way to control spending.  As with all new entitlements, the rolling cost crisis began almost immediately, says the Journal: 

• For fiscal 2010 taxpayer costs are $47 million over budget, in part due to the recession, and while the $913 million Patrick requested for 2011 is a 5 percent increase over 2010, spending has grown on average 6.7 percent per year.
• Meanwhile, average Massachusetts insurance premiums are now the highest in the nation; since 2006, they’ve climbed at an annual rate of 30 percent in the individual market.
• Small business costs have increased by 5.8 percent.
• Per capita health spending in Massachusetts is now 27 percent higher than the national average, and 15 percent higher even after adjusting for local wages and academic research grants.  

All of this is merely a preview of what the entire country will face if Democrats succeed with their plan to pound ObamaCare into law in anything like its current form.  Massachusetts is teaching the country a valuable lesson in how not to reform health care, if only anyone would pay attention, says the Journal. 

Source: Editorial, “Back to the ObamaCare Future: The Massachusetts ‘model’ moves to price controls,” Wall Street Journal, March 1, 2010. 

For text:

http://online.wsj.com/article/SB10001424052748703444804575071294139286892.html