ACA: If You Can’t Fix It, Tax It.

The “you have to pass it to find out what’s in it” remark signals a government out of control, as does the fact that the president has amended the law numerous times with no authority to do so.  Let’s look at some of the problems that have arisen while seeing what’s in it.

A “side-effect” of the ACA is the demise of employer-based health insurance plans among small businesses, as well as loss of spousal coverage at larger businesses.  This was probably intended as employer health benefits weren’t taxable while ACA plans are bought with after-tax dollars.  Tax-free benefits have annoyed big spending government officials for years.  Small employers may even give their employees raises to help compensate for the loss of a benefit, but those raises are taxable and may result in the employees becoming ineligible for a subsidy.  This is a de facto tax increase.  The employer mandate will impose a large burden on larger companies with it’s “one-size-fits-all” plan requirements, and their only alternative is, of course, to pay a tax.  Individuals who choose not to be insured will again, pay a tax.  Another tax increase is the medical device tax that hits every provider, and thus every patient who seeks health care.  There are also tax increases on “high income” individuals and a tax on “Cadillac” insurance plans.  So, besides tax increases, what else is wrong with the ACA?

The subsidies, like EITC, can serve as a disincentive to work.  Anyone can look at the eligibility requirements and figure out that if they make too much money health insurance will become a larger burden on their finances and the net result will be negative.  For small employers the ACA provides a disincentive to hire full-time workers.

The word “Affordable” is a misnomer.  The ACA does nothing to control the cost of medical care.  It imposes taxes.  It gives us a thousand new IRS agents in an already bloated agency but not one new doctor to meet an increased patient load.  It fails to include tort reform that might lower doctors’ insurance.  It does nothing to negotiate lower drug costs.  It does not reduce the overhead associated with medical administration and billing that consumes up to one-third of health care costs.  The replacement of group plans offered by small businesses with individual plans will raise costs as individuals have no bargaining power with insurers, providers, or drug companies.

Whether or not premiums are more affordable depends on who you are and where you live.  While some have found lower premiums many more have experienced sticker shock when their old but adequate (for them) plans were canceled and they had to shop on the exchanges.  Unreasonably high deductibles that can range up to $10,000 or more have hit almost everyone.  With high deductibles and co-pays, reasonably healthy people will pay all their health care expenses while the insurance company pockets the premiums and pays nothing.  Is this what they call “wealth redistribution”?  Actually it’s form of rationing as people avoid going to the doctor.

The ACA failed to address monopoly situations as has occurred in NH where a single insurer had imposed a narrow network that excluded many doctors and hospitals.  That situation is relieved in 2015 but a good law wouldn’t have allowed it to happen.  Many people had to switch doctors and travel further for care for no good reason.

Finally there are the many misleading statements that accompanied the ACA, like “you can keep your plan”, “you can keep your doctor”, “costs will be reduced” and even “no new taxes on people making less than $250K a year”.  The cost burden falls mainly on the middle class who make less than that figure but more than what would qualify them for a subsidy.  The ACA also contains a marriage penalty that can be a disincentive to marriage.

Liberals have raised taxes, increased the size of government, discouraged small business health benefits, and established disincentives to work, hire, or marry in order to insure a small percentage of the population that was uninsured.  How is this moving forward?

Before ending let’s look at two things that are right with the ACA.  You can’t be denied coverage for pre-existing conditions.  That was a win for the people because many people are born with medical conditions they have no control over.  Your policy can’t be canceled for being sick.  That’s another win.  Denying policy renewal because a claim was submitted is and will continue to be common in both the home and auto insurance businesses, however.

I won’t suggest a replacement because, in spite of liberal remarks that conservatives have criticized the ACA while offering no alternatives, there are several proposed alternatives that avoid putting the government in charge of your health care.

The best health care plan is not a mandate, it’s the one that works best for you.

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