You are here: Home » Archives »

Let’s face it: Obamacare was One Big Awful Mistake for America

September 18, 2013 07:33

It’s time for Washington to acknowledge the problem and defund Obamacare.

Pending disaster with Obamadon’tcare from The Heritage Foundation:

The movement to defund Obamacare has reached a critical moment. According to news reports, House Republicans are deciding this morning whether they will use a government funding bill to stop the unfair, unaffordable, and unworkable health care law.

With less than two weeks until the government takeover of health care, it’s time for Republicans and Democrats to put aside party politics and do right by the American people: Stop Obamacare before it’s too late.

>>> Today at noon ET: Representative Tom Graves (R-GA) and Dr. Tim Shepherd answer your questions about defunding Obamacare

Four new polls over the past week have confirmed mounting concerns about the law. You could lose your current health coverage, see your hours cut at work, and end up with bureaucrats coming between you and your doctor.

Here’s a sampling of where Americans stand on Obamacare:

68 percent are concerned about the impact on their personal health care under Obamacare (Fox News poll, September 17)
57 percent oppose Obamacare (CNN/ORC International survey, September 11)
52 percent believe Obamacare will result in their health care costs increasing (NBC News/Wall Street Journal poll, September 15)
51 percent want Congress to cut funding for Obamacare (Rasmussen Reports, September 17)

Americans recognize that Obamacare is bad for our country. Labor unions have sought relief from it; Democrats have called it a “train wreck,” and Washington’s political class is getting exemptions or special treatment.

The American people aren’t so fortunate. But their message appears to be breaking through to Capitol Hill.

Over the course of the summer, a growing chorus of grassroots activists spoke up and made their voices heard at events like Heritage Action’s town hall meetings. Bloomberg’s Josh Green predicted they “could end up being the sleeper events of the political season and major factor in the fiscal and budgetary showdowns soon to come.”

Even in New York City, where Heritage unveiled a massive billboard last week, the message is sinking in. Heritage’s Chris Jacobs was in Times Square to ask people for their perspectives on Obamacare. (Watch the video below.)

Let’s face it: Obamacare was a mistake. It’s time for Washington to acknowledge the problem and defund Obamacare.

We may not all agree on the solution for America’s health care system, but an increasing number of Americans agree that Obamacare is the wrong prescription.

5 Ways Obama Has Trampled the Constitution

09/17/2013

Today, the Constitution turns 226 years old. Let’s not forget it states that the President “shall take Care that the Laws be faithfully executed.”

The Obama Administration has done the opposite, turning the law on its head and ignoring constitutional limitations on its power.

>>> Read the Constitution now

Here are five of the Administration’s largest violations:

1. Changing Obamacare on the fly without congressional action

The Patient Protection and Affordable Care Act requires that businesses employing 50 or more full-time employees must provide health insurance or pay a fine per uncovered employee. The law schedules this mandate to begin in January 2014. Yet the Administration has already announced that it will put this requirement on hold.

Meanwhile, Congress explicitly considered and rejected proposed amendments to Obamacare that would have created a specific allowance for a congressional health insurance subsidy in the exchanges, and indeed, such an exemption is illegal. But the Administration told Members of Congress and their staffers that it would give them a generous taxpayer-funded subsidy just the same.

Obamacare won’t work as written, and the Administration is just seizing power unilaterally to rewrite it.

2. Implementing the DREAM Act by executive fiat

Congress has repeatedly considered, and rejected, a bill known as the Dream Act that would effectively grant amnesty to many illegal aliens. Yet in June 2012, Department of Homeland Security Secretary Janet Napolitano issued a directive to immigration officials instructing them to defer deportation proceedings against an estimated 1.7 million illegal aliens. Oddly, this happened about a year after President Obama admitted that “the President doesn’t have the authority to simply ignore Congress and say, ‘We’re not going to enforce the laws you’ve passed.’”

3. Making “recess appointments” while the Senate was in session

In January 2012, President Obama made four “recess” appointments to the National Labor Relations Board (NLRB) and Consumer Financial Protection Bureau, claiming that the Senate was not available to confirm those appointees. Yet the Senate was not in recess at that time. The Recess Appointments Clause is not an alternative to Senate confirmation and is supposed to be only a stopgap for times when the Senate is unable to provide advice and consent. Eventually, a three-judge panel of the D.C. Circuit struck down the appointments to the NLRB as unconstitutional.

4. Waiving welfare work requirements

In July 2012, the Department of Health and Human Services gutted the work requirements out of the welfare reform law passed in 1996. It notified states of Secretary Kathleen Sebelius’s “willingness to exercise her waiver authority” so that states may eliminate the work participation requirement of Section 407 of the 1996 reforms. This flatly contradicts the law, which provides that waivers granted under other sections of the law “shall not affect the applicability of section 407 to the State.” Despite this unambiguous language, the Obama Administration continues to flout the law with its “revisionist” interpretation.

5. Encouraging federal contractors to violate the law

The WARN Act requires that federal contractors give 60 days’ notice before a mass layoff or plant closing. Employers who do not give notice are liable for employees’ back pay and benefits as well as additional penalties. With defense-related spending cuts set to start on January 2, 2013, defense contractors should have issued notice by November 2, 2012 (just four days before the presidential election). Yet, the Department of Labor instructed defense contractors not to issue notice for layoffs due to sequestration until after the election—and assured them they would be reimbursed with taxpayer funds for any subsequent liability for violating the law.

One of the Constitution’s strongest features is its simplicity. It doesn’t serve as a laundry list of rights, as many modern constitutions attempt to do. Instead, it lays out a governing framework, divides power among three co-equal branches, and protects Americans from having their rights usurped by an overreaching government.

But for the Constitution to survive the next quarter-century, we need leaders who are dedicated to maintaining it, not stretching it to suit their immediate political needs.

Will Unions Want to Repeal Obamacare?

09/16/2013

In a typical Friday afternoon “news dump,” the Treasury Department announced it could not grant unions’ request for another special Obamacare break.

This time, unions had lobbied the Administration to let union-run, multi-employer plans receive taxpayer-funded insurance subsidies on the new exchanges. These subsidies would be in addition to the tax break that multi-employer plans, like health plans offered by all employers, already receive.

Union leaders wrote to Senate Majority Leader Harry Reid (D-NV) and House Minority Leader Nancy Pelosi (D-CA) in July asking for the Obamacare “fix,” stating that their progressive “vision has come back to haunt us”:

When you and the President sought our support for the Affordable Care Act (ACA), you pledged that if we liked the health plans we have now, we could keep them. Sadly, that promise is under threat. Right now, unless you and the Obama Administration enact an equitable fix, the ACA will shatter not only our hard-earned health benefits, but destroy the foundation of the 40 hour work week that is the backbone of the American middle class.

However, despite comments by Reid that unions would get another special break, the Administration actually found one part of the law it wants to uphold—after all the waivers, delays, and illegal modifications made to other parts of Obamacare.

The question for unions is, what will they do now? Terry O’Sullivan, President of the Laborers International Union of North America, said on Wednesday that his union wants Obamacare “fixed, fixed, fixed….But if the [law] isn’t fixed…then I believe it needs to be repealed.”

O’Sullivan got his answer two days later—the Administration claims the law can’t be fixed. So will his union now call for Obamacare’s repeal?

As the old saying goes, “Better late than never.” Here’s hoping the Laborers Union, and other unions—having finally discovered that Obamacare could cost them both their jobs and their health insurance—ask Congress to stop the law now.

Why This Doctor Fears Obamacare

09/12/2013

Dr. Tim Shepherd talks about his patients like they’re his own family.

He gets emotional when he thinks about a patient he’s been treating for 20 years, and talks about a new patient who’s making progress like it’s his first grandchild.

He says his favorite part about being a doctor isn’t having specialized knowledge or the power to “save lives.” It’s the opportunity to take care of people.

“It makes it difficult to take care of the whole person if you don’t have the environment where you are free to do that,” Shepherd told Heritage.

Unfortunately, everything Dr. Shepherd loves about his job is now at risk because of Obamacare.

The father of 11 children, including Heritage marketing associate Josh Shepherd, has run a family practice in Lewisville, Texas, for 35 years. He’s concerned about the impact of the law on the care he is able to offer his patients.

“There’s a lot of administrative work already, which is taking away from patient care,” he said. Of the practice’s 15 employees, five do only paperwork, and they are constantly fighting with insurance companies and Medicare.

So it’s no wonder Dr. Shepherd is dreading the layers of bureaucracy Obamacare creates—layers he’ll have to fight through to treat his patients. His practice will be faced with more government regulation and will be increasingly dependent on unreliable government reimbursement for medical services.

Shepherd said many family doctors just like him are either retiring or leaving their practices to join large medical corporations. He said doctors are being told their individual practices can’t survive the pressure of Obamacare’s administrative costs.

But Shepherd doesn’t want to give up or change his practice because of Obamacare.

“People having choice is a very important part of medical care,” Shepherd emphasized. People have a personal connection with their family doctors, but Obamacare will take away that freedom of choice.

While Shepherd is determined to look for innovative ways to keep his family practice independent, he knows the hazards of Obamacare are real. He doesn’t want doctors to be forced to give up on their patients, and that’s why he’s advocating for a full defunding of Obamacare.

“I am a believer in defunding Obamacare because I think it’s going to be a disaster for our country,” he said.

General support for Obamacare has dropped to less than 40 percent, according to a poll released yesterday. The American people are not in favor of this threat to their health care and their relationships with their doctors. All the more reason Congress should listen and defund it now.

Obamacare Quiz for Employers

08/27/2013

If you work somewhere, Obamacare is most likely affecting your employer—and you.

In a new paper, Heritage’s Alyene Senger explains how “Obamacare will impose new health coverage costs, the employer mandate, compliance regulations, and new taxes on all businesses.”

How will businesses respond to all these costs and regulations? What would you do? Take our quiz.

employer quiz

Obamacare’s Impact on Businesses: An Update

By Alyene Senger

Obamacare will impose new health coverage costs, the employer mandate, compliance regulations, and new taxes on all businesses. Altogether, these constraints will dramatically affect companies’ per-employee costs, desire to provide health coverage, and motivation to grow in terms of both income and employment.

Further Burdening Businesses

Obamacare is likely to exacerbate many of the concerns and costs that are already burdening businesses—particularly small-business owners—in at least four ways.

1. Higher Health Care Costs. Obamacare does nothing to reduce the continually increasing costs facing businesses that provide health insurance coverage. In fact, Obamacare’s wide variety of benefit and coverage mandates—combined with new taxes, fees, and penalties—will increase the cost of providing coverage.

The increased costs of health insurance might lead employers with fewer than 50 employees to drop coverage if they currently offer it, as there is nothing in Obamacare that would prevent them from doing so.

Employers that do offer coverage might respond by changing their health plans to accommodate the cost increases. For example, UPS has restructured its coverage to exclude the working spouses of its employees. The company expects this to affect 15,000 employees for an annual savings of $60 million. UPS very clearly cites additional costs imposed by Obamacare as a contributing factor in its decision, listing several Obamacare provisions that increased their costs.[1]

2. Employer Mandate. Obamacare’s employer mandate forces all employers with more than 50 full-time employees—defined as those who work at least 30 hours per week—to provide health insurance for employees or pay a penalty of $2,000 per employee (excluding the first 30) or $3,000 per employee that receives a premium subsidy, whichever is less.

This creates an incentive for businesses to avoid both the penalty and cost of coverage by hiring part-time employees instead of full-time employees, since businesses will not be penalized for failing to provide health insurance to part-time employees. This affects a wide range of businesses, but it hits low-income workers particularly hard.[2] Adjunct professors, certain state government employees, and many fast-food and retail industry workers have already been impacted.[3]

The Obama Administration has unilaterally delayed enforcement of the employer mandate for one year, but a temporary delay is of little help, because many employers had already cut hours and will not choose to increase hours again now only to cut them again next year.

3. Higher Regulation Compliance Costs. Small businesses do not have the capacity to easily take on additional administrative complexities. Many small companies will have to hire additional workers—and incur higher external accounting expenses—to handle the enhanced compliance regulations on health insurance plans.

4. Medicare Taxes on Flow-Through and Investment Income. Obamacare increases the Medicare payroll tax by 0.9 percent and establishes a new 3.8 percent Medicare surtax on unearned (investment) income such as capital gains and dividends for high-income earners. The increased payroll tax, in addition to wage and salary income, applies to “flow-through” business income[4] earned by small businesses.

Small businesses are major job creators, and higher taxes on them will slow job creation. Moreover, the wage thresholds on this tax increase are not indexed to inflation and, consequently, will push more small-business owners into this higher tax group as time goes on. The new surtax creates an even greater deterrence to investment than the tax code applied previously. This new extra deterrence to investment will add to the tax code’s already substantial drag on economic growth.

Obamacare Policies Already Failing Small Businesses

Obamacare did include some specific policies intended to help small businesses, but they are falling far short of expectations.

Small Business Tax Credit. Obamacare provides tax credits to small employers that provide health insurance for workers who earn relatively low average wages. However, the credit is temporary and is available for a maximum of only six years and for only two years after the exchanges begin operating in 2014. The credit amount is reduced as firm size increases and as the average employee wage increases.

The credit has largely failed to encourage small employers to offer health insurance to their employees, with only 7 percent of the 4.4 million potentially eligible employers claiming it by mid-2011. J. Russell George, Treasury Inspector General for Tax Administration, testified before Congress that “through mid-October 2011, the IRS reported that 309,000 taxpayers…had claimed the Credit for a total amount of $416 million. This is substantially lower than the Congressional Budget Office estimate that taxpayers would claim up to $2 billion of Credit for Tax Year 2010.”[5]

In an analysis of the credit’s low use and complexity, the Government Accountability Office attributed the low claim rate largely to the credit’s design.[6] The credit amount is not high enough to incentivize employers to offer coverage and is so complex and time-consuming that small businesses are reluctant to apply for it.

Delay in SHOP Exchange Requirement. In the process of Obamacare’s massive implementation, several pieces of the law have been delayed or changed. One delay that particularly impacts small businesses is a requirement in the Small Business Health Options Program (SHOP) exchange.

While the SHOP exchange held little benefit to begin with, the Obama Administration has postponed its most meaningful aspect: the ability for employees to choose their health plans and premium aggregation. As health policy scholar Timothy Jost writes, the delay will “disappoint those who have seen employee choice as the primary benefit of the SHOP exchange. It also leaves unclear what advantage the SHOP exchange offers employers over the outside small-group market.”[7]

Obamacare Is Bad for Business

Obamacare saddles businesses with more burdens than benefits. Not only do Obamacare’s policies fail to help small businesses in the way intended, but the unintended consequences of its mandates and regulations are even worse. As Obamacare’s full implementation nears, its increased costs and complexities are likely to significantly hinder business growth and success.

—Alyene Senger is a Research Associate in the Center for Health Policy Studies at The Heritage Foundation.

When You Can’t Actually Keep Your Health Care Plan

08/22/2013

President Obama has said that his health care law largely doesn’t impact anyone who already has coverage. Tell that to all the people who are being dropped from their health plans.

UPS made a news splash yesterday when it announced it is dropping coverage for spouses of employees if they are offered coverage through their own employers. The delivery company expects to remove 15,000 working spouses from its health coverage next year, saving the company about $60 million a year.

And UPS isn’t the only one. Dropping spousal coverage has become a trend among employers due to continually rising health care costs. Obamacare’s wide variety of benefit and coverage mandates combined with new fees, taxes, and penalties of course all increase the cost of coverage, intensifying the trend. The University of Virginia made a similar announcement yesterday.

According to a new survey by consultants Towers Watson, in 2013, 4 percent of surveyed employers excluded working spouses from coverage and another 8 percent plan to do so in 2014.

There’s no ambiguity here. UPS was clear that Obamacare played a large role in its decision to change its plan structure:

“[T]he ACA has mandated several changes that have been impacting the cost of coverage for UPS employees since its implementation. These include:

Coverage for dependent children up to age; regardless of whether they are enrolled in school, are married, or (beginning 2014) have coverage available from their own employer;

Removal of lifetime and annual benefit limits;

Fees for comparative effectiveness research; and

Fees to help fund the public exchanges.

We are making these changes to, in part, offset cost increases due to the ACA and so that healthcare premiums remain the same for most of our people.” (Page 18 of the memo).

And many more changes to employer-sponsored insurance are likely to come in the near future. According to the Towers Watson survey, when asked how they thought plans would change by 2018—the year that Obamacare’s “Cadillac” tax on high-cost plans takes effect—92 percent of employers said plans would be different, with 47 percent saying they anticipated significant or transformative change.

Do you like your health care plan? Sorry. With Obamacare in effect, costs are going up and plans are changing. If lawmakers would defund this unworkable law, we could focus on health care reform that puts people in charge of the type of health coverage they want.