[StBernard] Obamacare: Raising Insurance Premiums on Struggling Families

[Westley Annis]

IN CASE YOU MISSED IT 
A Taxing Insurance System

Bobby Jindal
March 23, 2014
Townhall
<http://click.bsftransmit7.com/ClickThru.aspx?pubids=393%7c65084%7c9390%7c5&
digest=DY9HsLvitJtehhvvwPOJTg&sysid=1>
<http://click.bsftransmit7.com/ClickThru.aspx?pubids=393%7c65095%7c9390%7c5&
digest=EvdBcY7BoXNPcQVvhKGyGQ&sysid=1>
<http://click.bsftransmit7.com/ClickThru.aspx?pubids=393%7c65096%7c9390%7c5&
digest=rgO675qJLOihB%2f2H%2bVnrIQ&sysid=1> 
 
If President Obama is interested in lowering inequality, he has a funny way
of showing it. In a speech last December, the President claimed that income
inequality is "the defining challenge of our time," and pledged new
government action to reduce the gap between rich and poor.

Ironically enough, one of the policies the President claimed will "solve"
inequality-the massive health care legislation he signed into law-will
result in the health insurers who provide care to the lowest-income
Americans getting taxed.

You read that right: Obamacare taxes health insurers who provide care
through Medicaid, the state-federal partnership providing care to low-income
families and individuals with disabilities. The law raises $8 billion in
taxes on insurers this year, rising to over $14 billion annually by 2018.

Under the law, most managed care plans that provide treatment to vulnerable
populations in Medicaid will be subject to the tax. Likewise, most Medicare
Advantage plans chosen by seniors will be forced to pay this new Obamacare
surcharge.

Because of the way the law was written and applied, the health insurer tax
will have some truly perverse effects. In Louisiana, we will have to pay our
Medicaid plans more to offset the cost of the health insurer tax. But in
doing so, we will claim federal matching funds on those higher Medicaid
payments. Imagine that: The federal government is paying states to fund the
taxes Washington itself imposed!

Democrats like to claim that these taxes will be borne by "greedy" insurance
companies, and that ordinary Americans won't suffer. But non-partisan
experts have said insurers' cost of the tax will be passed on to insurers'
customers, which is consistent with economic theory-and basic common sense.

Both the Congressional Budget Office and the Joint Committee on Taxation
agree that these taxes will ultimately be paid by consumers, in the form of
higher premiums. The Joint Committee on Taxation said that repealing the
insurer tax would reduce premiums by 2-2.5 percent. That means the insurer
tax raises premiums by $350-400 per year for the average family health
insurance plan.

Remember that Obamacare's individual mandate was ruled a tax by the Supreme
Court two years ago. So Obamacare taxes you if you don't buy health
insurance, and taxes most people who do buy insurance. Businesses face the
same dilemma: Large firms are taxed if they don't provide their workers with
insurance, but if they offer their employees coverage, the law's health
insurance tax could raise their premiums even higher.

And all these taxes-enforced by your helpful friends at the IRS-are harming
American families, and our economy. The Congressional Budget Office recently
concluded that Obamacare raises effective marginal tax rates, discouraging
millions of Americans from working. CBO also concluded that the law will
reduce aggregate labor compensation, and result in lower demand for
lower-wage workers.

To end where we began: A law that taxes those providing care to the most
vulnerable, raises insurance premiums on struggling families, and reduces
the American workforce and compensation is exactly the wrong way to address
income inequality. In fact, it epitomizes Ronald Reagan's famous quip that
the nine most terrifying words are "I'm from the government and I'm here to
help." President Obama should go back to the drawing board on his agenda,
and Congress should repeal Obamacare and focus on enacting true health
reform-changes that will lower costs, not raise them.



 
<http://click.bsftransmit7.com/ClickThru.aspx?pubids=393%7c65097%7c9390%7c5&
digest=AEmeT8x%2bBNVPiXTJPOM4TQ&sysid=1>