At the signing of the Senate health bill today, President Barack Obama said: “In a few moments, when I sign this bill, all of the overheated rhetoric over reform will finally confront the reality of reform.” Let’s review some of the “overheated rhetoric” that is about to get tested by reality.
Over the past months, the President and Congress have promised: that premiums would drop by $2500 per family; that if you like what you’ve got, you can keep it; that it would bend the cost curve down; that it would decrease the federal deficit. The fact of the matter is, none of these things will become reality once the bill is implemented—these claims are nothing but the rhetoric attached to an unpopular piece of legislation in the hopes of creating support that has yet to materialize.
The truth about the bill is already becoming evident as effected parties become vocal with their concerns. Some highlights just from today’s headlines include:
State Medicaid Programs Worry About Cost of Expansion: The bill will increase coverage among the uninsured largely through the expansion of Medicaid, a low quality, poorly structured government health care program which is paid for jointly by the federal and state governments. Though the bill will cover the cost of the benefits expansion, it will not cover the added administrative costs, which Heritage analyst Ed Haislmaier has highlighted. According to an article on Bloomberg.com, “States faced with unprecedented declines in tax collections are cutting benefits and payments to hospitals and doctors in Medicaid, the health program for the poor paid jointly by state and U.S. governments. The costs to hire staff and plan for the average 25 percent increase in Medicaid rolls may swamp budgets.”
Haislmaier projects the added administrative cost to the states would total $9.6 billion between 2014, when the provision is implemented, and 2019. This extra burden comes at a time when states are trying to tighten their budgets to account for decreasing revenues. Research by former Heritage analyst Dennis Smith and Ed Haislmaier shows that, as the fiscal burden of the Medicaid expansion grows, it would be in states’ interests to drop the program entirely: “The savings to state budgets are so enormous that failure to leave Medicaid might be viewed as irresponsible on the part of elected state officials. The federal government, however, would be left holding a trillion-dollar-plus tab.”
Businesses that Offer Already Offer Insurance Face Growth-Stifling Expenses: Caterpillar Inc. recently addressed a letter to House leadership claiming that the health care legislation passed Sunday would result in over $100 million in new costs for the company in the first year of implementation alone, due to the increase in Medicare taxes and mandated benefits. Said the letter, “We can ill-afford cost increases that place us at a disadvantage versus our global competitors.” Effects of the bill’s provisions will include job loss, wage reductions, and reduced hours, as testified by more than 130 economists in a letter to President Obama and members of Congress.
In recent research, Heritage analysts Karen Campbell and Guinevere Nell further demonstrate that the economic impact of taxing investments to pay for the bill will be disastrous. In recent months, Americans have made it adamantly clear that their top priority is jobs and the economy—instead, Congress has delivered a health bill that will harm both and burden the ability of American companies to compete globally.
And this is just the tip of the iceberg. The negative unintended consequences of the Senate bill will be quick to surface now that the bill has been signed into law. Americans must remain aware of the direction in which this legislation will lead our nation such that the requisite change will be swift and sure.