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  • Surprise, Surprise: Yet Another Part of Obamacare Increases Premiums and Kills Jobs

    Even without Obamacare, the United States faces rising health care costs and an economy struggling to recover from the recent downturn. Despite its supporters’ promises, the health care law does not solve these problems. A study released today by the National Federation of Independent Business highlights the impact of Obamacare’s new health insurance tax alone on Americans’ health care costs and the health of the economy.

    Obamacare institutes a premium tax on health insurers that offer full coverage beginning in 2014. Before it became law, Heritage expert Edmund Haislmaier wrote that such a tax would increase health care costs, increase taxes, create new inequities, be disingenuous, create perverse incentives, distort the market, and expand federal power.

    In a recent study by the consulting firm Oliver Wyman showed that this tax will increase insurance premiums by, on average, 1.9 to 2.3 percent in 2014. The impact will grow with time, reaching 2.8 to 3.7 percent by 2023. Like the nominal premium increases occurring due to already-enacted parts of Obamacare, these may sound insignificant on their own. But the cumulative impact—in conjunction with cost increases that would have occurred anyhow—will be much higher premiums for families and individuals: “For small group coverage, this will on average increase the cost to cover an individual by about $2,800, and a family by about $6,800 over a ten-year period, beginning in 2014.”

    The NFIB study released today shows the effect that premium hikes will have on employment and job creation. As NFIB researcher Michael Chow explains, “For a small business owner who does not self-insure, this increase in premiums will be borne by both the employer and the employee, each of whom contributes toward financing the insurance.” The report shows that the new tax will reduce private sector employment in 2021 by anywhere between 125,000 and 249,000 jobs.

    Of the jobs losses, 59 percent will come from small firms with fewer than 500 employees, and 25 percent will come from the smallest firms with fewer than 20 employees. The tax will also reduce real gross domestic product by $18–26 billion in 2021.

    The main purpose of the health insurance premium tax is to raise federal revenue to pay for the costly parts of Obamacare, including its expansion of Medicaid and creation of new federal subsidies. The tax is projected to collect $90 billion in new revenue through 2020. But, as Haislmaier warns, “This insurance premium tax would create a new, permanent federal tax that could, and likely would, be increased by Congress in future years as the growth in new government spending in the legislation outstrips the growth of revenues to fund that spending.”

    The health insurance premium tax isn’t the only provision of the health care law that hurts the economy. All told, Obamacare’s job-killing provisions will tax job creators, reduce investment, and cause the most harm to low-income workers. According to Heritage economists, “The best way to prevent further erosion of the economy is to repeal the new law.”

    Alyene Senger contributed to this post.

    Posted in Featured, Obamacare [slideshow_deploy]

    9 Responses to Surprise, Surprise: Yet Another Part of Obamacare Increases Premiums and Kills Jobs

    1. Bobbie says:

      repeal on the basis of inequitable benefit, increased hardship and intentional corruption.
      wwwwhat was the benefit of obamacare again?

      It only makes corrupt sense to have every single person insured by a piece of paper. reduce medical expenses (as was promised) and leave health up to ones own as only the self has control and insurance a privilege as it once was.

      Let it be when the doctor takes an oath, the costs of fulfilling that oath are rightfully his/facility's (plenty of ways to work costs out that aren't unfairly put on those uninvolved) where no government authority over ones own can slap expenses on the people while government takes a cut for themselves and at the same time creates ineffective, costly, unaccountable make work that provides government control over ones own personal health. Does that make sense? please repeal this unethical, unconstitutional con! it only seems to benefit the employment status under government rule and ps government has no credit in accountability.

    2. CraigJCasey says:

      Some estimates are that enrollees into the Medicaid ghetto (where you cannot find a doctor) will be expanded 62%. Since Medicaid is already trillions in the hole and unsustainable, how will you expand that? Where will the 4000-12000 new doctors come from to treat the new medicaid enrollees? The answer is rationing, and it's very dangerous in healthcare. People die or suffer greatly. Obamacare is really about human misery, forgetting the astronomical cost. http://www.cobrahealth.com/Obamacare-rationing.html.

      Medicaid Patients go to the ER since they can't get a Dr appointment. One study shows that actually no insurance is better than mediciad! And name my just one well run government program? So much for gov run healthcare.

      The VA is a great place to look at how government healthcare is run: A recent Newsweek cover story on the VHA revealed "an overloaded bureaucracy cluttered with red tape; veterans having to wait weeks or months for mental health care and other appointments; families sliding into debt as VA case managers study disability claims over many months, and the seriously wounded requiring help from outside experts just to understand the VA's arcane system of rights and benefits."

    3. saveamerica says:

      nobody can take care of anyone besides oneself. time to appropriate expenses the same and bring back private services at reasonable costs. private practices take accountability government control won't.

    4. Sandy says:

      Read Ayn Rand's Atlas Shrugged. Robin Hood gave Charity with money he did not own-he took it from the rich and gave to the poor. The original welfare program? Obama's programs are nothing more than Revenge on the successful to give to those that are unwilling, unprepared, and unable to work. In that category I would only willingly support those unable to wokr due to health problems-mental or physical. Tell me why it is I should contribute to the support of any able bodied person?

      • Mike says:

        Indeed even the Robin Hood of childhood fame stole the money back from the evil prince and sheriff after they stole it from the people.
        All should be made to contribute somehow if possible.

    5. Janet Toney says:

      I am a Republican from a long line of Republicans. I was born into an extremely blessed financially family. I never had to want for anything. I have always had the best in medical care. I was in an accident years ago, my Dad had me flown in a med vac plane to the hospital where the best specialist in the U.S. was working. I have always had insurance. I feel sorry for Americans without insurance. It is ashamed a so called Christan nation resents helping others in need. This is not Biblical.

      • Craig Heisserer says:

        Janet, I appreciate your sentiment, but Obamacare is not Biblical and not about helping those in need. It is about a Socialist Medical system where Big Government makes medical treatment decision they are not qualified to make while wasting billions, then trillions of tax dollars. If it was about helping others in need they would address that issued alone, not implementing a Government take over of 1/6 of the economy.

      • Bobbie says:

        instead of feeling sorry for them why aren't you helping them? if you're extremely blessed financially, why aren't you inspiring the OWS crowd? what does the force of national insurance have to do with your pity for Americans? What benefit is insurance today? Waste of paper, time and money! Why not exclude insurance and pay what can be afforded to active income? what faith is yours that keeps you from helping those you pity without involving the controlling source of government? fake

      • Mike says:

        Not all in this nation are Christians. Many of those who are contribute to charity already. Churches raise funds for people in health needs all the time.
        Not only is Medicaid a waste of time it is the most inefficient way to manage health care. If nothing else just have the recipient go get a healthcare plan and pay the premiums.
        Besides these people do not go with out health care. They go to the ER all the time. Yes at an added cost but in places where there are free clinics many of the homeless and those on Medicaid go to the ER anyhow.
        The point would be to get Washington to stop spending it so states can gather their resources and decide how to care for people in their states.

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