Plan Stymies Innovation and Increases Costs

The American people were promised they would save money and that their jobs and health insurance would be more secure if health reform passed. But the promises already are being broken, and workers will pay the price for ObamaCare’s failures.

Health costs will rise, taxes will go up, millions will lose the health insurance they have now, wages will flatten and businesses will find it harder to create new jobs. This is not a prescription for a more prosperous future.

President Obama said that by the end of his first term in office, families’ health costs would be $2,500 lower. But the Congressional Budget Office says families who buy

their own health insurance will pay $15,200 a year for a policy by 2016, compared with only $13,100 if the law hadn’t been enacted. That means families will pay $2,100 more, not $2,500 less — a difference of $4,600 a year.

The government will, for the first time, tell Americans how much they must spend on a government-mandated health insurance policy. Some people will get subsidies, but most will not. For many, health insurance may be the first or second biggest expenditure in their family budget. Those who don’t comply will be fined on their taxes.

Further, the health overhaul law did nothing to deter lawsuit abuse, so doctors will continue to practice defensive medicine, driving health costs ever higher and making it harder for firms to continue providing coverage and pay their workers decent salaries.

The new law levies $500 billion in new taxes to pay for its massive entitlement expansions. The administration’s own actuary, Rick Foster, said these taxes will “generally be passed through to health consumers in the form of higher drug and devices prices and higher premiums.” In other words, the middle class will pay.

The health law will also swell the deficit. The former director of the Congressional Budget Office, Douglas Holtz-Eakin, says that the subsidies for health insurance in the health law will cost $1.4 trillion, not the $450 billion estimated by the CBO.

That’s because as many as 35 million people will lose their health insurance at work since employers will have a strong financial incentive to drop coverage and dump workers into taxpayer-subsidized plans.

Under the law, companies face only $2,000 in fines if they don’t offer coverage but would pay an average of $20,000 if they provide health insurance for workers with families.

Firms that do continue to offer insurance will have a hard time paying the high premiums and still offering pay raises.

Hiring new workers, particularly entry-level employees, will be a risk fewer employers will be willing to take. Low-income workers are most threatened: If an employer can’t justify paying their salaries plus mandatory health costs, workers may very well lose their jobs. That is not a path to prosperity.

And if health is wealth, all of us will suffer as money that medical companies would have spent on research into new treatments and cures is instead taken up in federal taxes to pay for new and expanded entitlements.

If U. S. firms cut their research spending, medical innovation will be reduced. We may never know of the new treatments for cancer or the cure for Parkinson’s disease that a key scientist would have found if her lab hadn’t closed.

Higher health costs, lost jobs, lower wages, higher taxes and less medical innovation — American workers will not be more prosperous as a result of ObamaCare. We need health sector reform, but this isn’t it.

That is why poll after poll shows a strong majority wants ObamaCare repealed and replaced with sensible reform that doesn’t wreak havoc with our health sector and our economy.

Published in The Buffalo News, September 19, 2010.

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