Where Are the Jobs? Gone to ObamaCare

Maybe not every one, but, from my conversations with business owners and entrepreneurs across the country, it is inescapable that ObamaCare is killing job creation and smothering the recovery.

And now we have a study that shows the correlation: The Heritage Foundation’s James Sherk compared job growth before and after the health overhaul law passed in March of 2010.


Job creation has basically flatlined. Before the health overhaul law passed, the number of new jobs was soaring. Private-sector job creation had improved by an average of nearly 68,000 a month in the 15 months before April 2010. But in the 15 months since then, it has slowed to an average of 6,500 a month.

Sherk points out in his paper that “correlation cannot prove causation.” But he says the evidence “does lend strong weight to the voices of business who say that the law is preventing hiring.”

He quotes Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, as saying that “the lack of clarity about the cost implications of the recent health care legislation” is a prominent factor in the sluggish recovery.

“We’ve frequently heard strong comments to the effect of ‘my company won’t hire a single additional worker until we know what health insurance costs are going to be,'” the Fed president said.

When Speaker Boehner asks, “Where are the jobs?” the answer is increasingly clear.

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A trillion-dollar “glitch”: And the cost of ObamaCare to taxpayers keeps rising. The Hill carried an important article Thursday about “a glitch” in the health law — one that could mean a trillion-dollar underestimate of the true cost of ObamaCare.

Under the law, employees can obtain subsidized health insurance if their employer plan is “unaffordable,” meaning that it costs more than 9.5% if their income.

Let’s take a worker who has been getting a family health plan through her job. Apparently when congressional scorekeepers analyzed the bill before it passed last year, they decided that if the health plan that the employer was offering for an individual was affordable to the worker, that the worker wouldn’t be eligible for subsidies in the exchange. But what if the family plan the employer offered cost 20% of the worker’s salary? Too bad. The scorekeepers assumed she wouldn’t be eligible for subsidies.

The decision clearly was crucial to keeping the price tag of the total bill under the president’s $1 trillion limit, but liberal advocates now are worried about the impact. One admitted, “We’re going to have middle-class families extremely unhappy with health reform in 2014, because they’ll basically be facing financial penalties for not buying coverage when they don’t have access to any affordable options.”

The “glitch” explains the previously puzzling CBO estimate that only 9 to 10 million people who currently get health insurance at work would be switched to government-subsidized insurance in the exchanges. The (fictional) cost of ObamaCare could be kept under $1 trillion as long as they didn’t count all the people who would really go into the exchanges.

But if employers drop coverage completely, pay the federal fine, and send their employees to the exchanges, then their employees will be eligible for subsidized coverage. In a study last year, former CBO director and now president of the American Action Forum, Douglas Holtz-Eakin, says that as many as 35 million more people will flood into the exchanges, driving up the cost of ObamaCare by $1 trillion or more.

So we have a trillion-dollar “glitch” in ObamaCare’s cost. Repeal and replace, anyone?

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Higher costs for seniors: One thing is clear from the debt ceiling controversy swirling in Washington: There is absolutely, positively no way to solve the debt problem unless we get entitlement spending under control. And ObamaCare compounds the entitlement problem by piling trillions more debt obligations on top of the mountain of debt we already have.

One of the most deceptive budget gimmicks on the debt negotiating table in Washington right now is one that would pretend to reduce the government’s deficit by increasing drug costs for seniors.

Here’s how it works:

A proposal by Rep. Henry Waxman (D-CA) and Sen. Jay Rockefeller (D-WV) would require drug companies to pay a rebate to the federal government for prescription drugs sold through Medicare Part D for low-income seniors. President Obama has endorsed the scheme. It’s basically a tax that drug companies would have to pay to provide drugs to low-income seniors who are eligible for both Medicare and Medicaid.

But Doug Holtz-Eakin and his colleague at the American Action Forum, Michael Ramlet, show that the rebates would translate into higher costs for other seniors in their new paper, “Cost shifting debt reduction to America’s seniors.” They find the scheme could increase Medicare drug plan premium costs for up to 17 million seniors by as much as 40 percent.

Pharmaceutical companies already are required to pay rebates to states for the right to sell their products to Medicaid patients, and it has been demonstrated that this increases prescription drug costs in the private market. The latest plan for Medicare drug rebates would only add to the “tangled web of cost shifting” in the U.S. health sector, they explain.

This rebate tax is not a way to cut government spending but is simply a ploy to shift higher costs to seniors. Congress should look elsewhere for real savings rather than resorting to gimmicks that will trick seniors into picking up the bill.

CLIP OF THE WEEK

Eakinomics: Medicare Part D

Former CBO Director and American Action Forum President Doug Holtz-Eakin walks through the liberal plan to achieve savings through mandatory Part D rebates. Holtz-Eakin’s new study reveals this plan does little to help Americans and will drastically increase the cost for seniors from 19% – 39%.
Watch now >>

 

 

GALEN IN THE NEWS

Sebelius in the Hot Seat over IPAB

Grace-Marie Turner
National Review Online: Critical Condition, 07/21/11

Health Secretary Kathleen Sebelius testified before two hearings in one week about the controversial Independent Payment Advisory Board (IPAB). She did everything she could to downplay its powers. But IPAB symbolizes everything that is wrong with ObamaCare — taking power away from doctors and patients and putting it in the hands of elite experts who have virtually no accountability to voters. And IPAB will be charged with cutting payments even more than current law already does in order to reach ever-declining statutory targets. Unless Congress can muster super-majority votes to come up with its own cuts to reach the same targets, the dictates of these unelected technocrats will carry the force of law.

Read More »

HEALTH REFORM

Watch for dramatic declines in employer-provided health insurance
Senator John Barrasso, The Sacramento Bee, 07/21/11

Recovery Stalled After ObamaCare Passed
James Sherk, The Heritage Foundation, 07/19/11

Analysis: Job Growth Was 10-Fold Higher Before the Democrats Passed ObamaCare
Jeffrey H. Anderson, The Weekly Standard: The Blog, 07/21/11

Estimates of Medical Device Spending in the United States
Gerald Donahoe and Guy King, F.S.A., M.A.A.A., AdvaMed, 06/11

Health Insurance Exchanges: A Race to the Bottom
Scott Gottlieb, RealClearMarkets.com, 07/21/11

Healthcare law could leave families with high insurance costs
Julian Pecquet, The Hill: Healthwatch, 07/21/11

Health Care Waivers Now At 1,471
Jake Tapper, ABC News: Political Punch, 07/15/11

The Business of Insurance: Demystifying Health Insurance Rates
Tory Bunce, Council for Affordable Health Insurance, 07/11

Why Companies Hire
Harold L. Sirkin, The Plain Dealer, 07/15/11

Health Insurance Exchanges: What If They Issued 347 Pages of Regulations and Nobody Cared?
John R. Graham, Pacific Research Institute, 07/19/11

Government Mandates Make Health Savings More Elusive
Sally C. Pipes, Forbes.com, 07/18/11

Don’t Blame Innovation For Rising Health Care Costs
Peter Pitts, The Muskegon Chronicle, 07/14/11

STATE ISSUES

Health Care Reform in Maine: Reversing “ObamaCare Lite”
Tarren Bragdon and Joel Allumbaugh, The Heritage Foundation, 07/19/11

MEDICARE AND MEDICAID

Cost Shifting Debt Reduction to America’s Seniors: Medicare Part D Rebates Would Dramatically Increase Drug Premiums
Douglas Holtz-Eakin and Michael Ramlet, American Action Forum, 07/21/11

How to wreck a prescription-drug program
Paul Howard, The Washington Times, 07/21/11

Medicare Reform and Fiscal Reality
Joseph Antos, Journal of Policy Analysis and Management, 07/15/11

Top-down Controls Not the Solution: Response to Marmor, Oberlander, and White
Joseph Antos, Journal of Policy Analysis and Management, 07/15/11

A Prescription for Savings: Reducing Drug Costs to Medicare
Scott Gottlieb, M.D., Testimony Before the Senate Special Committee on Aging, 07/21/11

The Effects of Medicaid Coverage — Learning from the Oregon Experiment
Katherine Baicker, Ph.D., and Amy Finkelstein, Ph.D., The New England Journal of Medicine, 07/20/11

COMPARATIVE EFFECTIVENESS RESEARCH

Comparative Effectiveness Reviews: Quantitative Analysis of Research and Development Investment Effects
Benjamin Zycher, Ph.D., Pacific Research Institute, 07/15/11

INTERNATIONAL HEALTH SYSTEMS

Average Personal Affordability of Prescription Drug Spending in Canada and the United States 2011
Mark Rovere and Brett J. Skinner, Fraser Institute, 07/21/11

Events

Mobile Health: Innovations in Care & the Spectrum Challenge
Institute for Policy Innovation Event
Tuesday, July 26, 2011
10:00am – 11:30am
Washington, DC

State of Health: Seizing Opportunities, Achieving Results
Colorado Health Foundation Symposium
July 27-29, 2011
Keystone, Colorado
Grace-Marie Turner will participate in an interactive debate on repealing PPACA at 7:30pm on Wednesday, July 27.

New Approach in Improving Patient Safety
Philips Webinar
Thursday, July 28, 2011
1:30pm EDT

The Department of Defense’s Essential Role in Global Health
Research America
Thursday, July 28, 2011
11:00am – 12:30pm
Washington, DC

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