Claim: We need ObamaCare to cover the millions of poor Americans who cannot afford health insurance.
Fact: If that was the case, then why not reform Medicaid and Medicare to cover more people in need? Instead, ObamaCare creates a mammoth new entitlement not only for the poor, but to cover all households with incomes up to 133 percent of the federal poverty level! Not only that, but it subsidizes insurance (with attendant regulations) for families with incomes between 133 and 400 percent of the federal definition of poverty. According to the Congressional Budget Office, that adds up to a total of 34 million Americans on new entitlement programs, costing hundreds of billions of dollars when we already are facing trillions of dollars of crushing debt that threatens the solvency of the greatest economy the world has ever known. – Source: “Obamacare: The Impact On Future Generations,” by James C. Capretta, The Heritage Foundation, June 1, 2010
Claim: ObamaCare corrects the “doc fix” problem.
Fact: Hardly. Sure, the law raises a number of taxes, but none of the new revenue is applied to solve the “doc fix” problem – the money Medicare is not reimbursing physicians for their services to Medicare patients. Instead, the administration plans to restore the 21 percent cut in doctors’ fees charged to Medicare. But without the new revenue applied to it, nor any offsetting spending cuts anywhere else, the cost of the “doc fix” will escalate between $250-$400 billion over a decade, leaving the problem even more difficult to remedy later. – Source: “Obamacare: The Impact On Future Generations,” by James C. Capretta, The Heritage Foundation, June 1, 2010
Claim: ObamaCare makes the healthcare system more efficient.
Fact: One doesn’t need to look far for an example to disprove that claim. Even one of the jewels in the law proponents love to talk about, the Community Living Assistance Services and Supports (CLASS) Act, complicates the system and runs up debt. CLASS a voluntary long-term care insurance program. Enrollees must pay premiums for five years before claiming benefits. According to the Congressional Budget Office, this will create a $70 billion surplus over 10 years, helping reduce the deficit. But Medicare’s own chief actuary says the money will be needed immediately to pay claims, wiping out any deficit reduction. In fact, the actuary says, claims will exceed the surplus necessitating “dramatic cuts to benefits” or more taxpayer money to cover the costs. The CLASS Act also disproves the claim that Obamacare is not designed to compete with private sector insurance. – Source:“Obamacare: The Impact On Future Generations,” by James C. Capretta, The Heritage Foundation, June 1, 2010
Claim: ObamaCare exchanges won’t compete with private insurance plans nor drive people out of employer-based plans.
Fact: Douglas Holtz-Eakin, former director of the Congressional Budget Office, and Cameron Smith, both with the American Action Forum, estimate that up to 35 million people will be moved out of job-based coverage and into government subsidized “state exchanges.” With heavy new regulations and taxes on employers as well as the insurance industry, it is likely many companies will have to jettison their plans, indeed forcing employees into the exchanges. If that the number reaches the American Action Forum estimate, the cost to taxpayers for coverage over 10 years will increase by $400 billion more than the Obamacare estimate. . – Source: “Obamacare: The Impact On Future Generations,” by James C. Capretta, The Heritage Foundation, June 1, 2010
Claim: ObamaCare will ease rising healthcare costs.
Fact: The Congressional Budget Office estimates that 30 million Americans will be receive taxpayer financed subsidization for health insurance. That number alone will increase the demand exponentially for a service under stress, resulting in classic supply and demand price increases. – Source: “ObamaCare: The Impact On Future Generations,” by James C. Capretta, The Heritage Foundation, June 1, 2010
Claim: ObamaCare “bends the cost curve down” through “delivery system reform.”
Fact: Nothing is more annoying than new jargon designed to make the proponents of radical change seem as if they are supreme experts – especially when they are decidedly wrong. But here we go: ObamaCare supporters say they can reduce costs (“bend the cost curve down”) by increasing efficiency in healthcare services (“delivery system reform”). But the portions of the law that purport to do this are small tweaks of the system and/or are pilot projects, not likely to improve the way hospitals and care providers do business. Besides, when does a government regulation ever improve a business’ delivery of its goods or services?
In fact, what the administration means by “bending the cost curve down” is its rate reductions in Medicare payments “across the board and without regard to any assessment of quality of the care.” Medicare’s chief actuary admits that these rate reductions will drive many hospitals out of the Medicare system leaving only a few hospitals available for Medicare beneficiaries. Can someone say, “Rationing”? – Source: “ObamaCare: The Impact On Future Generations,” by James C. Capretta, The Heritage Foundation, June 1, 2010
Claim: ObamaCare cuts spending in certain areas that will reduce the budget deficit and debt.
Fact: What cuts the administration says it is making actually are counted twice, not to mention a reliance on tax and fee increases rather than reductions in spending. It uses the so-called cuts to account for savings as well as the reallocation of funds to start new entitlement programs. Furthermore, many of its projections, by many experts, are much too optimistic to count toward real or true savings. Also, many of the “savings” (i.e., tax increases) go toward Medicare hospital payments. That, in effect, becomes nothing more than a new spending program adding to the deficit. – Source: “Obamacare: The Impact On Future Generations,” by James C. Capretta, The Heritage Foundation, June 1, 2010
Claim: ObamaCare will reduce government costs and is not government-run health care.
Fact: ObamaCare is configured on double-counting, dodgy estimates, omissions, gimmicks and rosy assumptions. Sober estimates project a $500 billion addition to the deficit over the remainder of the decade and $1.5 trillion the 10 years after that. What cuts are made will be forced and arbitrary once spending goes out of control, which will lead to fewer healthcare treatment options (that rationing thing, again). – Source: “ObamaCare: The Impact On Future Generations,” by James C. Capretta, The Heritage Foundation, June 1, 2010
Claim: There is no real estate tax in ObamaCare.
Fact: Perhaps, technically. At least there is no new real estate tax in the ObamaCare law. However, there is a surtax on “unearned income” or capital gains of 3.8 percent on top of the current capital gains tax for a married couple making more than $250,000 in adjusted gross income or $200,000 for single people. But it also applies to a capital gain exceeding $500,000 for married couples, or $250,000 for singles, on the sale of a primary home.
There’s more. According to the National Federation of Independent Business the Medicare investment tax is the first non-wage tax ever levied to fund Medicare and will be a disincentive for business expansion and job creation: “The $250,000/$500,000 thresholds only apply to the sale of a primary residence, so the tax will hit other property sales harder.” – Source: “Settling the Question of a Real Estate Tax in ObamaCare,” by Kathryn Nix, The Foundry (Heritage Foundation blog), October 22, 2010
Claim: ObamaCare keeps the president’s promise not to raise taxes on people earning $250,00 a year.
Fact: False! How can we count the ways? There are so many, but one of the most insidious of the dozens of new taxes also flies in the face of his goal of making government in general, and especially health care costs, transparent. One horrifying example is the health insurance premium excise tax. This is a hidden tax that will apply to health insurance policies valued at $10,200 for individuals and $27,500 for families. It begins in 2018 and the administration projects it to raise $32 billion in tax revenue for the government by 2019.
According to the Heritage Foundation, “the new excise tax will make health insurance more costly and complex, while leaving the perverse incentives and inequities of the existing system in place.” Not only is this a hidden tax rolled into the cost of a health insurance plan, but many people not in the $250,000 salary range have high-end health plans. Plus, there’s more deception. Insurance plan values will be indexed to increase at inflation plus 1 percent – a rate below medical cost inflation – pulling a larger number of health insurance plans into the excise tax bracket and sucking a greater share of taxes from people and households who earn less than $250,000 a year. – Source: “ObamaCare: Impact on Taxpayers,” by Curtis Dubay, The Heritage Foundation, April 14, 2010.
ObamaCare 411 