Employers will have to pay a new 8 payroll tax which may cost you your job.
By Peter Ferrara Institute for Policy Innovation
Obama repeatedly says that under his health reform plan if you like your doctor you will be able to keep him or her. But the question is whether under his reform plan your doctor will be willing to keep you when the government refuses to pay adequately for the health care services you want and need. Despite the talking points we are now hearing to the contrary the bottom line is that the Obama-Democrat health overhaul legislation would result in thorough and detailed government control over health care.
Government rationing will deny you health care and cause severe loss of freedom of choice and control over health care disabling record high taxes that will leave America uncompetitive in the world economy higher not lower overall health costs and higher not lower federal spending and deficits.
This all translates into a major decline in the standard of living for the American people.
Today Americans enjoy the most advanced sophisticated cutting edge health care in the world with those deprived of essential health care flocking to our shores from the world over seeking survival. But under the Obama/Democrat health regime this will be gone replaced by the outdated failed throwback socialized medicine policies of foreign countries that reflect their lower standards of living.
This will be true most of all for our nations seniors who are most in need of high quality medical care. As former Clinton advisor Dick Morris author of the incisive new book Catastrophe argues:
Obamas health care proposal is in effect the repeal of the Medicare program as we know it. The elderly will go from being the group with the most access to free medical care to the one with the least access. Indeed the principal impact of the Obama health care program will be to reduce sharply the medical services the elderly can use. No longer will their every medical need be met their every medication prescribed their every need to improve their quality of life answered.
Loss of Freedom of Choice: Obamas Public Option Government Health Insurance Plan
President Obama says a cornerstone of his plan is that if you like the health insurance you have today you will be able to keep it. But under the Obama/Democrat plan if you have employer provided health insurance that wont be your choice. It will be your employers choice.
Your employer may decide to dump you into the so-called public option government insurance plan and pay the 8 payroll tax. If the employers work force averages $50000 a year in wages then the employer would only have to pay $4000 per year per worker under the payroll tax which may well be a considerable cost savings from his current health coverage.
Even if you purchase health insurance directly on your own you will not be able to keep that insurance if your insurer is driven out of business by the public option government health plan.
One big reason this will happen under the Obama health plan is that the government has the power to dictate what the doctors and hospitals would be paid by the government plan. Medicare now pays
doctors almost 20 below market rates and hospitals more than 30 below market with Medicaid paying 30 to 40 less than that.
The health overhaul bills now pending in fact both say that the government public option will pay doctors and hospitals under the Medicare rates to start but the government is expressly given the power to change that over time and pay even lower rates as it has under Medicaid.
Private health plans will not be able to compete with a public government plan that has lower costs because it dictates lower payment rates to doctors and hospitals. Indeed the current experience with Medicaid and Medicare is that these government plans drive up the cost of private health plans as doctors and hospitals underpaid by the government health plans try to recover the losses by charging more to privately insured patients.
Private health plans trying to compete with the government public option would consequently be at even more of a competitive disadvantage.
The Lewin Group an independent health care consulting firm estimates that as a result of these factors the cost of the private health insurance options for family coverage under the House bill would be increased by $2148 a year in 2010 as compared to the public option a competitive disadvantage of almost 25.
The public option government insurance plan is also likely to be subsidized by the taxpayers over time while the private plans will be subject to discriminatory new tax burdens. The Lewin Group estimates that because of all these illegitimate competitive disadvantages for the private plans about 88.1 million workers would shift from private employer insurance to the public plan to start about two-thirds.
Almost half of those insured in the individual market would soon be forced into the new public option as well. The end result over time is likely to be a government single payer monopoly with all of the private plans driven out of business.
Choice under Obamas health plan will also be greatly restricted because the government will mandate that you buy the health plan the government decides you must have. You will consequently be forced to pay the costs of all the politically correct benefits the government will require regardless of whether you want those benefits.
Obama likes to say that he wants a government public option health insurance plan to keep the insurance companies honest. But once the public option has driven those insurers out of business and becomes a government monopoly who is going to keep the government honest?
How the Obama Plan Will Ration and Deny You Care
The health care rationing under the Obama plan begins with the government public option health insurance plan sharply underpaying doctors hospitals and other health providers as discussed above. Any private plans that do manage to survive will be able to do so only by paying what the government plan pays. So the government will end up dictating all payments to health providers in any event.
Doctors and hospitals will consequently begin to restrict their care to fit what the government will pay. Their practices will shrink to avoid the more expensive medical services and treatments that the government payments will not sufficiently cover.
But this underpayment has a second order effect on investment in the health care industry which is far more powerful. Investors are not going to finance acquisition of the latest most advanced equipment and technologies with the government slashing compensation for the services such technologies provide.
Investors are also not going to finance expanded or new hospital facilities or clinics or even the full maintenance of existing ones.
This is how the long waiting lines for diagnostics surgery and other referrals begin to develop.
This is why in other countries with national health plans or socialized medicine facilities seem old aged and deteriorated.
Vast new realms of innovative new health services and care opened up by modern science will lag unutilized. Drug companies will also cut back sharply on investment in new cutting edge restorative painsaving or lifesaving miracle drugs. Many people will suffer or die unnecessarily as a result.
The supply of doctors surgeons and specialists will decline.
And employers not providing health insurance will have to pay a new 8 payroll tax which may cost you your job.
Peter Ferrara is Director of Entitlement & Budget Policy for the Institute for Policy Innovation and General Counsel of the American Civil Rights Union. He served in the White House Office of Policy Development under President Reagan and as Associate Deputy Attorney General of the United States under the first President Bush.
