As we mark the second anniversary of President Obama’s new healthcare law, there’s not much to celebrate. Obamacare has already inflicted heavy consequences on the economy, doctors, patients, businesses, and taxpayers – and there’s much more to come. It has yet to even take full effect.
Now, it goes without saying that imposing additional taxes on American families and businesses hurts investment, savings, job creation, and our struggling economy. But Obamacare does just that, inflicting more than $500 billion in new taxes; it increases taxes on medical devices and prescription drugs, levies a $32 billion excise tax for individuals and families with so-called “Cadillac” insurance plans (and many of these plans are anything but), and even imposes billions in taxes on tanning services.
Doctors, struggling with the already ballooning cost of practicing medicine, will now have to contend with even more regulatory compliance. We have the best doctors in the world, but many prospective doctors will simply decide to enter different fields if the cost of practicing medicine keeps rising. In fact, in just over a decade, the U.S. will experience an estimated shortage of up to 160,000 physicians.
Obamacare also raises costs dramatically for patients. The administration promised that Obamacare would lower premiums for the average family by $2,500, but Kaiser found that average family premiums have actually risen by $2,213 since Obama took office. And the nonpartisan Congressional Budget Office (CBO) projects that several of the law’s mandates will raise premiums even further – by as much as $2,100 per family.
And, because Obamacare has made employer-sponsored health insurance so expensive, many employers are simply deciding to drop their employees’ coverage With these employees then left to buy inferior health insurance on their own, those receiving subsidized healthcare from the federal government is estimated to rise to 19 million people by 2019, at a cost of $460 billion to taxpayers.
The law’s higher healthcare costs simply discourage small and large businesses from growing, and Obamacare’s requirement – under a $2,000 per employee non-compliance penalty – that businesses must purchase healthcare plans for their employees certainly gives these companies no incentive to bring on new employees. Indeed, many will simply choose to drop their employees’ coverage, pay the fine, and then raise wages to compensate for the loss of benefits; this is because many businesses would still come out ahead than if they offered employer-sponsored insurance. It’s the natural outcome of these Obamacare policies – and it’s not right.
At the end of the day, employees will be left with lower-quality coverage and taxpayers will be left to foot the bill in the form of subsidies for their new, sub-premium coverage.
It’s clear that the promises made by President Obama and congressional Democrats about their health plan were empty ones, especially with respect to costs and savings. Costs have soared and savings are not to be found. Obamacare is estimated to cost $245 billion by 2021, and may increase the deficit by at least $500 billion in its first 10 years – and more than $1.5 trillion in its second decade.
And, if that weren’t bad enough, former CBO Director Douglas Holtz-Eakin estimates that the Obamacare’s price tag could increase by close to $1 trillion over the first decade.
So much for the Administration saying that Obamacare wouldn’t increase the deficit by a single cent.
While repealing Obamacare is clearly in the best interest of our economy, jobs, doctors, patients, and taxpayers, there’s no denying that true healthcare reform is badly needed.
The key to meaningful reform, however, is not more government intervention, but market reforms that can control costs and improve quality through choice and competition. Enabling the purchase of health insurance across state lines, enacting medical liability reform, and expanding Health Savings Accounts, for instance, are all smart policies that would help put our healthcare system back on the right track.
So, happy birthday Obamacare. Let’s hope, after Americans have their say this November, that it’s your last.
Editor's Note: Congressman Jeff Flake is currently campaigning to repeal Obamacare, and has set up a petition voters for voters to sign if they choose. Congressman Flake is also a candidate for the US Senate.