Fix Health Care Policy

12 Days of Obamacare Surprises: Taxes

Photo: Jamie Grill Photography Tetra Images/Newscom

Not all surprises are good. When it comes to Obamacare, the original projections are turning into unfortunately different realities. For the next 10 days, Heritage is going to highlight one of the various changes in Obamacare projections (i.e. cost, enrollment, etc.) from when the law first passed until now.

To pay for massive new spending provisions, Obamacare includes 18 new or increased taxes, fees, and penalties.

Read the rest on The Foundry…

Tags: fees, higher costs, new spending provisions, ObamaCare, penalties, surprises, taxes

Top 5 Obamacare Promises to Remember

Remember when former Speaker of the House Nancy Pelosi (D–CA) told the American people that “we have to pass the [health care] bill so that you can find out what is in it”?

Well, it’s been over two years since the enactment of Obamacare, and we’ve found out a lot. Not only are the provisions currently in place falling short; the promises made about the health care law look to be broken. Here are five of them.

1. The law won’t raise taxes on families making less than $250,000 a year.

Obamacare includes over 18 new taxes (including the individual mandate) that will hit the middle class. These taxes come in all forms: on insurers, prescription drug manufacturers, medical device makers, and even tanning salons. Of course, the Administration would be quick to point out that none of these taxes is on individuals. But common sense tells us that these taxes will be passed on to the consumer.

As a result of the Supreme Court decision, the individual mandate is now a tax and one that the Administration can’t run away from. A new report from the Congressional Budget Office shows that nearly 70 percent of the individual mandate will be paid for by those earning less than 400 percent of the federal poverty level.

Read the rest on The Foundry…

Tags: failed promises, Individual Mandate, ObamaCare, pass the bill, taxes

FACT CHECK: Obama Misleads on Medicare, Taxes, and Regulations

During a Sunday evening interview on CBS’s “60 Minutes,” President Obama made numerous factually inaccurate or misleading claims.

Specifically, Obama claimed that he has not raised Americans’ taxes, that he has not raised costs for Medicare beneficiaries, and that he has imposed fewer regulations than his predecessor. The first two claims are false, and the third is highly misleading.

Obama: “You can’t ask me to…ask seniors to pay more for their Medicare.”

Fact: Obamacare’s cuts to Medicare will raise Medicare costs for many seniors.

Read the rest on The Foundry…

Tags: "60 Minutes", beneficiaries, CBS, facts, Medicare, myths, ObamaCare, President Obama, Seniors, taxes

Top Five Ways Obamacare Crushes the Middle Class

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:

1. 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.”

Read the rest on The Foundry…

Tags: decision making, middle-class families, Obamacare impact, regulations, taxes

Obamacare: Higher Taxes, More Uninsured, Says CBO

On March 13, the Congressional Budget Office (CBO) updated its score of Obamacare, announcing that the program is $48 billion cheaper than in its previous 2011 score.

The primary reason for this change is that more individuals will lose their employer-provided coverage than originally anticipated, and the government will collect $99 billion more in taxes and penalties. CBO also finds that there are more uninsured individuals.

In short, this new CBO update continues the trend of Obamacare becoming increasingly expensive and decreasingly effective with each new scoring update.

In this round, CBO announced that the individual mandate penalties will increase by one-third, or $11 billion, as more individuals choose not to purchase insurance. This is especially surprising since CBO also estimates that health insurance premiums will be cheaper in the next decade. Thus, even with cheaper premiums, fewer people will choose to acquire insurance.

Read the rest on The Foundry…

Tags: Congressional Budget Office, more penalties, Obamacare score, taxes, uninsured individuals

The 10 Terrible Provisions of Obamacare You May Not Have Heard Of

Obamacare includes such a variety and volume of negative policies that it’s hard to keep track of them all. Here is a list of 10 terrible provisions that every American should be aware of:

1. It increases taxes on families earning over $250,000. In 2013, the employee portion of the Medicare payroll tax will increase from 1.45 percent to 2.35 percent for families earning $250,000 or more and individuals earning $200,000 or more. The income threshold is not indexed for inflation, so more and more middle-income families will be hit by the tax hike as time goes on.

1. It adds a new tax to investment income. The increased payroll tax rate is also applied to high-earners’ investment income for the first time beginning in 2013. It will hit capital gains, dividends, rents, and royalties, discouraging investment and harming economic growth.
2. It puts new limitations on those with HSAs and FSAs. Starting in 2012, Obamacare restricts the products that consumers may purchase with a Health Savings Account (HSA) or Flexible Savings Account (FSA)—such as over-the-counter medications—and increases the penalty for such non-qualified uses of HSAs. It also limits the amount taxpayers may deposit into an FSA to $2,500 a year in 2013.
3. It adds a new tax on those who purchase medical devices. In 2013, a 2.3 percent excise tax will be applied to medical devices, causing a $28.5 billion tax hike on medical device manufacturers. The industry will pay for this tax by reducing jobs and passing additional costs on to consumers.
4. It penalizes marriage. Obamacare creates new taxpayer-funded subsidies for the low and middle classes to purchase health coverage, but the structure of the subsidies allows two individuals to claim more in subsidies alone than if married. This discriminates against married couples and discourages marriage at almost all age and income levels.

Read the rest on The Foundry…

Tags: higher costs, new limitations, Obamacare provisions, penalties, taxes

The Impact of Obamacare Video Series

During his 2012 State of the Union address, President Obama barely discussed his health care law. But that doesn’t mean Americans must remain in the dark about how the unpopular health law will impact each and every one of them. Heritage has compiled a series of videos that highlight how individuals and families will be affected by the new law.

Business Owners

Obamacare’s new taxes and mandates on business are a hindrance to economic growth and job creation. The law requires that employers provide health insurance to their employees or face a fine. As the cost of health insurance continues to increase under Obamacare, employers will face increasingly steep costs to keep employees insured and avoid the penalties. According to research by McKinsey and Company, close to one-third of employers says they will definitely or probably stop covering employees once Obamacare is fully implemented; this increased to 50 percent after the law had been explained to employers in greater detail.  (Read the rest on The Foundry…)

Tags: businesses, families, individuals, mandates, ObamaCare, Seniors, State of the Union address, taxes, videos

Side Effects: Federal Government Taxes Itself and the States

One especially peculiar side effect of Obamacare will cause the federal government to begin taxing itself and state governments. This begins in 2014 as the result of the new annual fee imposed on the health insurance industry.

The health insurer fee was created to fund new spending under Obamacare. The new tax hits not only private insurance but state Medicaid managed care programs that are contracted to insurers as well.

Many states contract with private insurers to provide care to their Medicaid beneficiaries. States pay these managed care organizations a fixed premium per member per month. The new tax will increase these premiums, because they will now have to include an allowance to offset the Obamacare fee and to cover the federal income tax impact on the additional revenue added to the premiums to cover the fee.   (Read the rest on The Foundry…)

Tags: federal income tax, managed care, Medicaid, ObamaCare, premiums, taxes

Congress Should Stop Subsidizing Warren Buffett’s Health Care, Not Increase His Taxes

Reports have surfaced that conservatives in Congress may propose further increasing income adjustment in Medicare to lessen the program’s insolvency. This is a great idea. While the left continues to argue for higher taxes for the likes of Warren Buffett to maintain the status quo of a costly, failing Medicare program, it makes more sense that Congress should simply stop subsidizing them.

As Congress continues to pursue solutions to the entitlement spending crisis, one question that must be answered is whether the United States should even have universal federal entitlements to begin with. Considering the wreckage of the nation’s finances, the answer is clearly no. It’s not only that we cannot afford it, but the very creation of popular dependency on government itself threatens prosperity.

For wealthier Americans like Buffett, the policy options are clear. The Obama Administration and its allies in Congress are obsessed with imposing higher taxes on them, regardless of the impact on investment in the economy and despite the fact that they already pay the bulk of federal income taxes. The intent behind this course of action is to maintain, largely unchanged, the existing federal entitlement regime.  (Read the rest on The Foundry…)

Tags: congress, entitlement spending, subsidizing Medicare, taxes, Warren Buffett

White House Admits Obamacare’s Individual Mandate is a Tax

Throughout his presidential campaign, then-candidate Barack Obama promised the American people: “If you’re a family that’s making $250,000 a year or less, you will see no increase in your taxes.” After he became President, Barack Obama reiterated that pledge, promising the American people in his September 9th health care press conference: “The middle-class will realize greater security, not higher taxes.” But Obamacare does contain tax hikes. Tons of them. From taxes on tanning beds to taxes on employment and investments, Obamacare is a certified job-killing machine.

None of these taxes touches the lives of every American as closely as the individual mandate to purchase health insurance. For the first time in American history, Obamacare forces all Americans to purchase a product or face sanction from the Internal Revenue Service. This is clearly a tax, as pointed out by ABC News’ George Stephanopoulos during a September 20th interview with the President himself. In an exchange that can only be described as “Clintonesque” Stephanopoulos pressed President Obama to admit his individual mandate was a tax. But President Obama refused to acknowledge reality and denied it. Stephanopoulos was forced to read the definition of “tax” straight from Merriam Webster’s Dictionary. But even then Obama refused to come clean: “George, the fact that you looked up Merriam’s Dictionary, the definition of tax increase, indicates to me that you’re stretching a little bit right now. … Nobody considers that a tax increase.” Well nobody but President Barack Obama’s Justice Department.

The New York Times confirmed Friday that in preparation for defending constitutionality of the Obamacare individual mandate in court, an Obama Justice Department legal brief argues that the penalty used to enforce the mandate is “a valid exercise” of Congress’s power to impose taxes. Mr. Obama’s own Justice Department further repudiates the President’s earlier statement by noting that the penalty is imposed and collected under the Internal Revenue Code, people must report it on their tax returns, and that the Congressional Budget Office estimates that it will cost Americans $4 billion a year. Yale Law School professor Jack Balkin told a meeting of progressive activists last month that President Obama “has not been honest with the American people about the nature of this bill. This bill is a tax.”

The fact that the Obama administration and their allies are now admitting the individual mandate is a tax betrays their very real fear that the Supreme Court could find Obamacare’s individual mandate unconstitutional. In the bill itself, Congress identified the Commerce Clause as the source of their authority to force all Americans to buy health insurance. But as our legal team has made eminently clear, the mandate does not purport to regulate or prohibit commerce of any kind. To the contrary, it purports to “regulate”—and penalize—inactivity. If the Supreme Court allows the Obamacare individual mandate to stand, then Congress could do anything it wanted. They could: require us to buy a new Chevy Impala each year to support the government-supported auto industry; require us to buy war bonds to pay for the Iraq and Afghan wars; or force us to eat our vegetables.

But even if the Obama administration is now admitting the individual mandate is a tax, that still does not make the law constitutional. Rather than operating as a tax on income, the mandate is a tax on the person and is, therefore, a capitation tax. Therefore the 16th Amendment’s grant of power to Congress to assess an income tax does not apply. The Constitution does allow Congress to assess a capitation tax, but that requires the tax be assessed evenly based op population. That is not how the Obamacare mandate works. It exempts and carves out far too many exceptions to past muster as a capitation tax. The Obamacare mandate is still unprecedented and unconstitutional.

But perhaps more importantly, what does the episode say about the integrity of the White House? The President went on national television and insisted in unequivocal terms that his individual mandate was not a tax. Now his administration is saying the exact opposite. At what point do the American people lose all faith in this President’s word?

Tags: constitutionality, Individual Mandate, job killer, ObamaCare, taxes