But there is a way out.
President Obama bludgeoned Obamacare through Congress on the claim, backed by CBO, that it would not add to the deficit, even though it adopts or wildly expands three entitlement programs. As I discuss in my new book, America’s Ticking Bankruptcy Bomb, close analysis of the CBO score and additional new data indicates that, quite to the contrary, Obamacare will likely add $4 to $6 trillion to the deficit over its first 20 years, and possibly more.
Of course, the deficit is not the biggest problem. Even bigger is that regardless of the deficit, Obamacare involves trillions of increased government spending and taxes. Worst of all is that it involves a loss of control over, and the quality of, our own health care. All of this is ultimately a tragedy because as my book also explains, the uninsured could all easily be covered without any individual or employer mandate for just a small fraction of the cost of Obamacare, as discussed below.
Deficits and Debt
CBO made three enormous conceptual errors in scoring the program as not adding to the deficit, explained in detail in my book. The first relates to the new middle class welfare entitlement adopted by Obamacare, providing government handouts for the purchase of health insurance for families earning up to four times the poverty level, or $88,000 for a family of four, indexed to grow to over $100,000 shortly.
These health insurance handouts go only to those who buy insurance on their own individually through the state based health insurance exchanges established under the legislation. Those who receive employer provided coverage are not eligible. CBO assumed that only 19 million workers will qualify for the handouts, out of a work force estimated at 162 million in 2014 mostly still receiving employer provided coverage. It consequently estimated the cost at only $450 billion over the first 10 years, or actually first 6 years of implementation of Obamacare.
But with the mandated insurance likely to cost $15,000 or more by 2016, employers will have powerful incentives to dump their employee coverage and pay the $2,000 per worker fine that applies to such termination of coverage. Employers are all the more likely to do this, and just pay their workers higher wages in place of the health coverage, precisely because the workers would then be able to get the huge welfare handouts for purchasing their insurance through the exchanges, resulting actually in a net income increase. As former CBO Director Douglas Holtz-Eakin reported in a paper for the American Action Forum,
“For example, a family earning about $59,000 a year in 2014 would receive a premium subsidy of about $7,200. A family making $71,000 would receive about $5,200; and even a family earning about $95,000 would receive a subsidy of almost $3,000. By 2018,…a family earning about $64,000 would receive a subsidy of over $10,000, a family earning $77,000 would receive a subsidy of $7,800 and families earning $102,000 would receive a subsidy of almost $5,000.”
In fact, in the exchanges, qualifying workers can even get subsidies covering their out-of-pocket expenses.
These are the reasons why a new study released by McKinsey & Company earlier this month concluded that Obamacare will result in “a radical restructuring of employer-sponsored heath benefits.” It found that “30 percent of employers will definitely or probably stop offering” employer health coverage after Obamacare is implemented, and “among employers with a high awareness of reform, this proportion increases to more than 50 percent.”
In the Wall Street Journal on June 8, Grace-Marie Turner, President of the Galen Institute, estimated based on the numbers in the McKinsey report that as many as 78 million Americans would lose their employer provided coverage. If those workers ended up receiving the new Obamacare exchange handouts, the estimated costs for those subsidies in the first 6 years alone would soar by 4 times, adding nearly $2 trillion to the costs and deficits of Obamacare during that time.
What happened to President Obama’s oft-repeated pledge that if you like your health insurance you can keep it? Another transparent manipulation of the public was Obama telling us on national television there is no way Obamacare’s individual mandate can be considered a tax, and then sending his government lawyers into court to argue that the individual mandate is constitutional because it is simply a tax. I predict that the Fourth Circuit Court of Appeals will issue a ruling soon upholding the individual mandate on the grounds that it is a tax.
The second conceptual fallacy in the CBO score was revealed in full by the 2010 Financial Report of the United States Government, released last December by the Treasury Department. It documents the total present value of the future cuts to Medicare under President Obama’s policies already enacted under current law as $15 trillion, primarily in payments to doctors and hospitals for health care provided to seniors.
Such draconian cuts in Medicare payments would create havoc and chaos in health care for seniors. Doctors, hospitals, surgeons and specialists providing critical care to the elderly such as surgery for hip and knee replacements, sophisticated diagnostics through MRIs and CT scans, and even treatment for cancer and heart disease would shut down and disappear in much of the country, and others would stop serving Medicare patients. If the government is not going to pay, then seniors are not going to get the health services, treatment and care they expect.
In fact, within a decade after Obamacare is implemented, Medicare’s payments to doctors and hospitals will be less than under Medicaid, where the poor face grave difficulties in finding timely treatment, and are documented to suffer worse health outcomes as a result.
A man of faith in a godless age is hitting Americans where it hurts.
Mr. and Mrs. American Spectator Reader, let P.J. O’Rourke talk sense to your kids.
In Britain, defending your property can get you life.
The debacle of this president’s administration is both a cause and a symptom of the decline of American values. Unless Congress impeaches him, that decline will go on unchecked. An eminent jurist surveys the damage and assesses the chances for the recovery of our culture.
It won’t take long for conservatives to scratch this presidential wannabe off their 2008 scorecard.
The American Christmas, like the songs that celebrate it, makes room for everybody under the rainbow. Is that why so many people seem to be hostile to it?
Was the President done in by the economy, or by the politics of the economy?