Healthcare Reform

Overview

On March 23, 2010 the United States House of Representatives passed the Patient Protection and Affordable Care Act and its companion The Healthcare and Education Reconciliation Act (which are collectively referred to as ObamaCare). The law, which is over 2,300 pages, contains numerous new taxes, new reporting burdens for small businesses, and creates a vast labyrinth of bureaucratic agencies that will now be responsible for administering and overseeing America’s healthcare system.

More Regulation

ObamaCare gives new (often undefined) powers to the Secretary of Health and Human Services. These powers include, but are not limited to:

• The power to oversee the private health insurance industry and attempt to set price controls
• The authority to regulate and approve any interstate purchases of health insurance (in 2014)
• The power to determine what is an “unreasonable” premium rate increase
• The authority to ban physician-owned hospitals from opening
• The authority to establish and oversee each state’s insurance “exchange program”

More Costs to the States

ObamaCare establishes nearly 100 grant programs for the states to apply for federal funding. This federal funding comes with significant strings attached, in the form of increased federal scrutiny and regulation. The new healthcare law represents a real danger to state budgets due to its requirements regarding increased Medicaid costs for the states. In the coming three years, it is anticipated that the majority of states will face budgetary crises solely based on their Medicaid programs – a problem which ObamaCare dramatically accelerates.

The Individual Mandate

One of the most important aspects of ObamaCare is the individual mandate, which stipulates that every individual must carry an “adequate” insurance policy or pay an annual fine or tax. The federal government (the Department of Health and Human Services) will determine what constitutes “adequate” insurance.

Twenty-one states are currently suing the federal government about the constitutionality of the individual mandate. The Obama Justice Department has thus far defended ObamaCare’s individual mandate based on Congress’s Constitutional power to tax.

Increased Costs to Consumers

In addition to the ObamaCare mandate that people buy insurance, ObamaCare also mandates that consumers buy more expensive health insurance – covering far more services - than they are currently purchasing today. This will make insurance much more expensive and will also eliminate lower-cost policies which result in fewer consumer choices. In fact, the non-partisan Congressional Budget Office (CBO) has concluded that this additional coverage mandate by itself will increase the cost to consumers by 27 to 30 percent by 2016.

This mandate will operate as a tax that will most negatively affect people who are younger and healthier. Americans in their 20s – who typically have far fewer medical needs and utilize healthcare services at a far lower rate than people in their 50s and 60s - will be force to buy very expensive insurance and pay for coverage they will likely never use. Accordingly, their premium dollars will not be used to provide younger Americans with coverage they need but instead will operate to shift the burdens of the healthcare system to those who are the healthiest.

The Future under ObamaCare

ObamaCare sets America on the same failed path of socialized medicine that other countries have taken. Canada and England, among others, have significantly longer wait-times to see doctors and specialists than the United States. Additionally, the medical field in countries with socialized medicine is a bureaucratic system with red-tape and unnecessary regulations, which make it difficult for innovative drugs and medical technologies to be approved. ObamaCare will transform America’s innovative healthcare system into a bureaucratic system with long delays and decreased consumer control.