President Obama has repeatedly claimed that he is “going to keep on fighting for what matters to middle class families.” Well, in this “fight,” the President seems to be his own worst enemy. His health care law does far more damage than good to the American middle class.
Here are the five most prevalent and harmful burdens the middle class will be forced to bear under Obamacare:
- More taxes. Obamacare imposes $502 billion of new or increased taxes and fees. Heritage expert Curtis Dubay explains that several of the taxes “will ultimately be passed on to [middle-income families] through higher prices. These include the fees on medical device manufacturers, pharmaceutical companies, and health insurance companies and the new tax on tanning services.” The middle class will also be burdened by the individual mandate to purchase insurance, new restrictions and limits on their tax-free health and flex savings accounts, and a new tax on high-cost (Cadillac) health plans. Starting next year, Obamacare increases the Medicare payroll tax from 2.9 percent to 3.8 percent for individuals earning above $200,000 and couples earning more than $250,000 and for the first time extends the tax to income earned from investment. But the threshold for the higher rate isn’t indexed to inflation and will impact more middle-class families each year. The 2012 Medicare trustees report states, “By the end of the long-range projection period, an estimated 80 percent of workers would pay the higher tax rate.”
- Loss of existing coverage. As many as 35 million people could lose their existing coverage because of Obamacare. This is because Obamacare creates financial incentives for employers to drop coverage for their employees. One report that examined the health insurance costs of 71 fortune 100 companies estimated savings of $422.4 billion between 2014 and 2023 if they dropped their employee coverage and paid the employer mandate penalty. Another study predicts that 30 percent of employers will definitely or probably drop coverage under Obamacare.
- Higher premiums. Americans who purchase coverage in the new Obamacare exchanges will find that health insurance is still very expensive. American Enterprise Institute resident scholar Scott Gottlieb, MD, explains, “For a family of four, premiums on even one of the lower priced ‘silver’ options could still cost more than $15,000 annually on the exchanges.” A family’s income might exclude them from subsidies but not be high enough to pay $15,000 for Obamacare’s government-approved insurance. “A family of four earning $90,000 annually takes home about $60,000 after local, state, and federal taxes. If they lose workplace coverage, and move onto the exchanges, they could find themselves spending as much as 25 percent of the family’s take home pay for an average policy ($15,000 for the ‘silver’ plan).”
- Rising health care costs. As premiums and overall health care costs continue to rise, middle-class families, including those receiving a subsidy, will be left paying more. Beginning in 2019, Obamacare’s cost-containment strategy for the exchanges is to hold the total cost of the subsidies to 0.504 percent of GDP. Charles Blahous, a Medicare trustee, concludes that “this limitation would likely cause the federal subsidies to grow less rapidly over the long term than the cost of health care and thus require low-income individuals in the exchanges to shoulder a steadily increasing percentage of their health costs.”
- More government control of health care. Obamacare transfers massive authority over to the Secretary of Health and Human Services and expands the role of government in delivering care and coverage. This huge expansion of government’s role in health means that, by 2020, more than half of all Americans will be dependent on the federal government for health care and government bureaucrats will be in charge of deciding what you can and cannot buy.
If President Obama is serious about “fighting for what matters to middle class families,” he should start by repealing his own health care law.
To watch Heritage’s video on Obamacare’s Impact on Families and Future Generations, click here.
Source material can be found at this site.