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Five
Ways Obamacare Crushes the Middle Class
by Alyene
Senger
June 3, 2012
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.
Click below
to see Heritage’s video on Obamacare’s Impact on Families and Future
Generations
Source:
blog.heritage.org
Read the
article and see the video at Mail Magazine 24
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