1. New Spending Grows the Federal Deficit: The Congressional Budget Office sets the projected cost of the healthcare package from 2010 to 2019 at $940 billion, reducing the deficit by $138 billion. The true cost of the new law will be far greater. The legislation uses budgetary gimmicks to make it appear cheaper, including omitting cuts to Medicare provider payment rates, double-counting savings from Medicare and the CLASS Act, indexing benefits to general inflation rather than medical inflation, and delaying expensive provisions of the bill. When these costs are accounted for, the new law is likely to cost $2.5 trillion.
2. Bending the Cost Curve in the Wrong Direction: The provisions of the legislation aimed at reducing healthcare spending are reactionary, addressing the symptoms rather than the root causes of growth in spending. Instead of reducing spending in healthcare, the bill will increase overall health spending in the U.S. by $222 billion between now and 2019. CBO reports that premiums in the non-group market will increase by 10%–13% as a result of the bill.
3. New Taxes and Mandates Hinder Economic Growth: The new law requires employers who do not offer insurance deemed adequate by the federal government to pay a fine of $2,000 for every employee, exempting the first 30 employees. Employers forced to pay this penalty will have to reduce wages, cut jobs, or rely more heavily on part-time workers. The healthcare package also taxes investment income.
4. Regulations Grow Government Control over Healthcare: The new law empowers the Department of Health and Human Services to define a required benefits package that every health plan in America must include. The law allows the federal government to dictate the prices that insurers set through new age-rating regulations and medical-loss ratio requirements.
5. Expanding Broken Entitlement Programs: Under the new law, Medicaid will be extended to all Americans who fall below 133% of the federal poverty level.
6. Burdening State Budgets: The reconciliation bill ensures that the federal government will cover the expansion of Medicaid benefits in all 50 states until 2017. Federal matching rates will decrease from 100% in 2017 to 93% in 2019, resting permanently there. Moreover, the 100% federal match rate does not include administrative costs, which will accrue a cost to the states of $9.6 billion between 2014 and 2019. The healthcare reconciliation bill further adds to several states’ new costs by changing Medicaid funding formulas.
7. Neglecting Medicare: Medicare is due to become insolvent in 2016, and long-term unfunded liabilities exceed $38 trillion. To address this, Medicare provider payment rates are scheduled to decrease annually. Congress votes to suspend these cuts every year but did not include a permanent way to rpay for the cuts to physician reimbursement rates in the new bill. Instead, they added a similar and even more unlikely “fix” to create savings in Medicare: more than half a trillion dollars in cuts to the program. These include billions in cuts to the popular Medicare Advantage program.
8. Creates Discrimination Against Low Income Workers: The employer mandate requires employers to offer a federally defined level of insurance or pay a fine. Even if an employer does offer insurance but their low-income employees elect to enter the health exchange, the employer will pay a $3,000 penalty for each employee who makes this choice. Depending on the proportion of an employer’s workforce that comes from low-income families, it would be more beneficial for employers to drop coverage altogether rather than pay for the increased penalty. This creates an incentive for employers to avoid hiring workers from low-income families, hurting those who need jobs the most.
9. Exchange Eligibility Creates Inequity: The new law will create generous subsidies for Americans to purchase insurance in health exchanges. These subsidies will be available to those who fall between 133% and 400% of the federal poverty level and are not offered federally defined sufficient assistance by their employer to purchase health insurance. All other Americans—including those in the very same income bracket—will not get subsidies. The federal government will thus create a gross inequity between Americans making similar incomes.
10. Questions of Constitutionality: 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 a stipulation of being a lawful citizen.
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