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The Amazing Carelessness Of ObamaCare

POSTED BY Galen Institute on May 11, 2010.

As more details emerge about the massive 2,700-page health overhaul law, even those who supported its passage are shocked by its sweeping implications and reach into every corner of our lives and society.

For example, small-business owners are telling members of Congress they are terrified about the risks the law presents to their ability to keep and hire workers — imperiling the nation's already fragile economic recovery.

Employers with more than 50 workers could face big penalties even if they are trying to do the right thing by offering health insurance to their workers. For example, they could be fined $2,000 per worker if they fail to follow Washington's rules in providing "affordable" coverage.

Companies are required to calculate whether their health plans meet Washington's affordability test by determining each employee's household income, not just what they are paying the worker. To say this presents a significant challenge is an understatement. But if employers fail, they could face fines of $100,000 or more.

Larger, publicly traded companies face additional costs. When lawmakers created the Medicare drug benefit in 2003, they wanted to make sure that employers who already were providing prescription drug coverage to their retirees didn't drop them and shift the cost to taxpayers. They offered a tax break that was generous enough for employers to continue to provide the retiree coverage but still cheaper than having taxpayers foot the full bill.

Thanks to the new health reform law, employers lose part of that subsidy. According to the consulting firm Towers Watson, this means that corporations will take a $14 billion hit to their earnings.

Companies big and small face tax hits, fines, and huge risks associated with the health overhaul law. And they will face an avalanche of new paperwork requirements as well.

The law requires businesses to file a so-called "1099" tax form for any purchase from an individual or business that totals more than $600 a year. It's a new effort to catch tax cheats.

In the past, companies were required to file these forms to individuals such as unincorporated consultants. Under the new legislation, however, they must file a report for every purchase over $600. Just imagine: Companies will now have to send tax forms to Staples for a year's worth of office supplies, or to airlines when they buy tickets!

Amazingly, the law is so careless that Congress jeopardized coverage for itself! It says members of Congress must join their constituents in getting insurance through the health insurance exchanges states are required to create.

The exchanges, though, won't be up and running until 2014. So what is Congress going to do until then? The administration's personnel office said it is basically going to ignore the law and continue to provide coverage.

States are at risk, too. Page 466 of the law says states are liable not just for paying for health benefits for Medicaid recipients but also for ensuring provision of "the care and services themselves."

Those five words mean that states must guarantee that Medicaid recipients are seen by a doctor. Alan Levine, Louisiana's health secretary, says this "leaves every state vulnerable to a new wave of lawsuits any time someone cannot access a service." He says the added cost would be incalculable.

How could all this have happened?

The Senate bill never was meant to be final law. It was designed to get 60 votes out of the Senate, and then lawmakers would work with the House to draft a cleaner bill. But once Scott Brown won Massachusetts' special Senate election and the Democrats lost their filibuster-proof majority, they couldn't get another vote out of the Senate. So the only way to get a bill to the president's desk was to have the House pass the Senate bill as is.

Not surprisingly, as Americans learn more about the legislation, their opposition grows. A recent poll from Indiana University shows that 58% of Americans want the law repealed. Only 12% in a recent FOX News poll said they believed the law should be implemented as is.

As more problems emerge, even supporters of the measure could come to realize that it imposes huge new taxes, provides benefits to relatively few, cuts existing services, and imposes expensive mandates on virtually everyone. This law is growing more unpopular by the day, and for good reason.

Published in Investor's Business Daily, May 11, 2010.

Filed Under: Uncategorized

The Amazing Carelessness Of ObamaCare

POSTED BY Galen Institute on May 11, 2010.

As more details emerge about the massive 2,700-page health overhaul law, even those who supported its passage are shocked by its sweeping implications and reach into every corner of our lives and society.

For example, small-business owners are telling members of Congress they are terrified about the risks the law presents to their ability to keep and hire workers — imperiling the nation's already fragile economic recovery.

Employers with more than 50 workers could face big penalties even if they are trying to do the right thing by offering health insurance to their workers. For example, they could be fined $2,000 per worker if they fail to follow Washington's rules in providing "affordable" coverage.

Companies are required to calculate whether their health plans meet Washington's affordability test by determining each employee's household income, not just what they are paying the worker. To say this presents a significant challenge is an understatement. But if employers fail, they could face fines of $100,000 or more.

Larger, publicly traded companies face additional costs. When lawmakers created the Medicare drug benefit in 2003, they wanted to make sure that employers who already were providing prescription drug coverage to their retirees didn't drop them and shift the cost to taxpayers. They offered a tax break that was generous enough for employers to continue to provide the retiree coverage but still cheaper than having taxpayers foot the full bill.

Thanks to the new health reform law, employers lose part of that subsidy. According to the consulting firm Towers Watson, this means that corporations will take a $14 billion hit to their earnings.

Companies big and small face tax hits, fines, and huge risks associated with the health overhaul law. And they will face an avalanche of new paperwork requirements as well.

The law requires businesses to file a so-called "1099" tax form for any purchase from an individual or business that totals more than $600 a year. It's a new effort to catch tax cheats.

In the past, companies were required to file these forms to individuals such as unincorporated consultants. Under the new legislation, however, they must file a report for every purchase over $600. Just imagine: Companies will now have to send tax forms to Staples for a year's worth of office supplies, or to airlines when they buy tickets!

Amazingly, the law is so careless that Congress jeopardized coverage for itself! It says members of Congress must join their constituents in getting insurance through the health insurance exchanges states are required to create.

The exchanges, though, won't be up and running until 2014. So what is Congress going to do until then? The administration's personnel office said it is basically going to ignore the law and continue to provide coverage.

States are at risk, too. Page 466 of the law says states are liable not just for paying for health benefits for Medicaid recipients but also for ensuring provision of "the care and services themselves."

Those five words mean that states must guarantee that Medicaid recipients are seen by a doctor. Alan Levine, Louisiana's health secretary, says this "leaves every state vulnerable to a new wave of lawsuits any time someone cannot access a service." He says the added cost would be incalculable.

How could all this have happened?

The Senate bill never was meant to be final law. It was designed to get 60 votes out of the Senate, and then lawmakers would work with the House to draft a cleaner bill. But once Scott Brown won Massachusetts' special Senate election and the Democrats lost their filibuster-proof majority, they couldn't get another vote out of the Senate. So the only way to get a bill to the president's desk was to have the House pass the Senate bill as is.

Not surprisingly, as Americans learn more about the legislation, their opposition grows. A recent poll from Indiana University shows that 58% of Americans want the law repealed. Only 12% in a recent FOX News poll said they believed the law should be implemented as is.

As more problems emerge, even supporters of the measure could come to realize that it imposes huge new taxes, provides benefits to relatively few, cuts existing services, and imposes expensive mandates on virtually everyone. This law is growing more unpopular by the day, and for good reason.

Published in Investor's Business Daily, May 11, 2010.

Filed Under: Uncategorized

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