No Wonder Our Horse Won't Run
The U.S. economy is a thoroughbred racehorse that has won every past race. Now, it won't run at all.
The trainers (Washington) first tried the "carrot" approach. They tempted the horse with apples (TARP funds), but somehow, the apples never got to the horse. Then they offered actual carrots (bailouts), but the faster rabbits (banks) ate them before the horse could. The thoroughbred just stood there.
The trainers switched to the "stick." They took away the horse's oats and hay and gave his food to a favorite animal (Solyndra). They removed the racing saddle (first position on GM stock), gave it to a rival horse (unions), and replaced the lightweight saddle with a very heavy western one (massive increase in bureaucracy). The horse started wobbling.
Now they are bringing out a cattle prod (higher taxes for all). The horse is falling down. I can see why.
The jockey atop the horse promised us he weighed less than nothing (would reduce costs). In fact, he weighs over 1,000 pounds (>$1 trillion in new spending). The jockey's name is ObamaCare. No wonder the poor horse won't run. He can't while carrying all that weight!
Since our stagnant economy is clearly foremost in everyone's mind, let's see how the ACA harms us not just medically, but fiscally.
A penalty tax (formerly the "individual mandate") will be imposed on tens of millions of (legal) Americans who are uninsured or underinsured. A minimum estimate is $2,500 more per year out of your wallet.
In New York State, Obama's "free" health insurance will cost those earning $35,000/year almost 16% of their total income ($5,555). A family earning $85,000/yr will pay 19% ($16,408/year) for Obama's "affordable" health insurance.
The Medicare tax of 2.9% will go up to 3.8%. Other ACA taxes include real estate transfer tax, tanning salon tax, cap on Flexible Spending Accounts, modified estate tax, and the disingenuously titled Cadillac Tax, advertised as a tax on the hyper-wealthy. Surprise! The "Cadillac Tax" applies to you.
Analysis of "Cadillac Tax" effects in Massachusetts showed that the average middle school teacher (hardly a Cadillac driver) will pay $2,080/yr above what she is already paying. A patrol police officer will have to shell out $5,390/yr more than before the ACA.
(Of course, if you had the political clout to get one of the more than 1,400 exemptions granted, you may avoid these financial disasters, for a while.)
Advocates of the ACA promised that it would reduce costs by getting people out of ERs and into doctors' offices. Question: what group constitutes 24% of all uninsured Americans and is the largest user group of ERs? Answer: illegal residents.
Next question: what group is exempt from paying for ObamaCare, is not eligible for Medicaid, and yet must be given "free" (unlimited) health care? Same answer.
Who pays for their free care? You know this one -- you do. (In universal health care countries, illegal residents do not receive government-supported health care.)
Last question: do you still believe the magical thinkers who promised that ObamaCare would reduce costs?
Health care providers
For years, Medicare has been paying doctors less and less. Most physicians simply can no longer afford to see Medicare patients. How does the ACA "fix" this problem? ObamaCare cuts physician reimbursements by another 21%-27%. Any wonder why doctors are quitting medicine?
When Congress defers the Medicare cuts for one year, they call it a "doc fix"! Do they really think we are that stupid?
Medicaid physicians are in the same boat as the Medicare ones. Already one third of U.S. doctors cannot afford to accept Medicaid-covered patients.
Doctors who can afford to see government-insured patients are an endangered species.
The ACA adds a host of expenses to the cost of doing business in the U.S. The indirect costs of an ever-expanding regulatory bureaucracy are certainly enormous but impossible to quantify.
The ACA direct costs make many commercial activities unsustainable. When large corporations like AT&T, Deere, and Medtronic showed Congress their cost calculations -- billions per year per company for ACA -- our representatives called the CEOs unsupportive, unfeeling, even unpatriotic. The businessmen were only doing their due diligence -- something Congress failed to do.
The Cadillac tax alone will cost small business owners in Massachusetts $8,690 per employee per year! This will drive many out of business. There is every reason to think that the same will happen in 49 other states.
To date, the ACA has driven insurance premiums up 18%-32%. For the self-employed, health insurance that was previously unaffordable is just more out of reach.
For American business, it is now cheaper to pay the penalty (tax) than to provide mandated health insurance. So employers are dropping health coverage for their employees. They are also turning full-time workers to part-time employees to circumvent the mandate for employer-supported health insurance coverage.
Under these conditions, no sane businessperson would think of doing the one thing that will get our racehorse (economy) running again: taking risks, expanding operations, and hiring new workers.
In fact, as a result of the ACA, workers are being laid off. At a time when job creation is "Job #1," ObamaCare is handing pink slips to private workers and to doctors. At the same time, Washington is hiring thousands of new federal regulators, authorization agents, compliance officers, etc. to implement the ACA.
The ACA's medical device tax is another economic suppressor. It levies 2.3% on gross revenues, not profit. Whether a company is profitable, barely breaking even, and especially a start-up, it will be saddled with this large tax. R&D, risk-taking, and hiring will cease. This tax will force small innovative companies into Chapter 7, resulting in even more pink slips.
As they scream on TV, "But wait! There's more!"
The ACA will increase adverse medical impacts for We the Patients. If the number of insured patients goes up, and when the number of providers goes down, each remaining provider will have less time with any one patient. What will happen to the error rate?
Both HIPAA and the ACA tighten the security of medical information, making communication and data-sharing increasingly difficult. The result will be even more errors, less learning, and again, more patients harmed.
Net result: Americans will be sicker. Sick people are very costly. If IPAB -- the Independent Payment Advisory Board, a division of ObamaCare -- does cut costs, sick people will not be a problem. They will be dead people.
Dead people are much cheaper than sick ones. They -- you and I -- will die because the treatments we need were labeled "not cost-effective" and are no longer available. (This is precisely what is happening in universal health care countries.)
So, when you cannot find a job, lose the one you have, get converted to part-time, or watch your father die when he could have been saved, remember the 1,000-pound jockey that is crushing our horse (our economy).
To paraphrase our 40th President, ObamaCare is the problem, not the solution.
Deane Waldman, M.D., MBA is a physician who quit practicing medicine after the 2012 election. He is the author of Uproot US Healthcare and Not Right! - Conversations with We The Patients (April 2013) as well as adjunct scholar for the Rio Grande Foundation in New Mexico.