Obamacare: It’s War on the Middle Class
September 25, 2009 | Filed Under Anti-Americanism, Barack Obama, Budget, Business, Capitalism, Communism, Congress, Democrats/Leftists, Economy/Finances, Free Trade, Freedom, Government, Corruption, Health, Liberals, President, Republicans, Society/Culture, Taxes, Warner Todd Huston | Comments Off
-By Warner Todd Huston
Once again we see that Barack Obama cannot be relied on to tell America the truth. During the late presidential campaign, Team Obama attacked Hillary Clinton for having mandates for health insurance yet now he is himself touting forced mandates on the people.
In 2008 an Obama flyer slammed Hillary for her forced insurance purchase suggestion. That flyer told Obamaites that, “Hillary’s health care plan forces everyone to buy insurance, even if you can’t afford it.” This was bad, Obama thought.
That was then.
Today Obama is pushing the same idea that he attacked Hillary for only but a year ago. In his speech to a joint session of Congress, for instance, Obama told the nation, “That’s why under my plan, individuals will be required to carry basic health insurance…”
And following suit, the Baucus bill in the Senate takes up the forced mandates on every class of American. As noted by John Goodman, the Baucus bill will:
- Require every American to buy a health insurance plan that will be designed in Washington and (through time) be shaped and molded by special interest pressures or pay a hefty tax.
- Subsidize health insurance for young people by taking about $500 billion away from Medicare and Medicaid.
- Cause several million (mostly moderate-income) seniors to lose their coverage under Medicare Advantage.
- Cause millions of families to move from private coverage (which allows them to see a broad array of doctors) to Medicaid and S-CHIP programs (where health care access is much more limited).
- Cause millions of American families to lose their current private coverage and obtain insurance in an artificial market (an Exchange), where insurers will have perverse incentives to underprovide to the sickest patients.
- Nationalize the private health insurance marketplace by effectively outlawing a real market for health care risks.
But there are at least two other onerous aspects to the Baucus bill that will hit Americans hard. The first is a 35% tax on private insurance that begins with the so-called Cadillac, high-end plans but eventually rolls downhill to hit all employer sponsored plans. The second is the employer play-or-pay mandate that will force many employers to instantly drop their employee’s healthcare plans.
This second part will truly hurt the middle class. Here is how Goodman puts it…
Even more disconcerting is the implicit tax on middle-income workers created by the employer play-or-pay mandate. Take an employee earning $50,000 a year and suppose “credible coverage” offered through an employer costs $13,000 for a family. Under Baucus, the maximum premium the employee can be charged is 13% of income, or $6,500. So the employer must pay the remaining $6,500.
But since fringe benefits are a substitute for wages, the employer’s annual $6,500 premium payment would come out of the wages that otherwise would have been paid. Under the Baucus bill, the employer does not have to provide insurance. But if the employer does not, the employee must obtain this insurance in the Exchange and the government will provide the $6,500. However, (and this is where Baucus differs from the other bills) the employer will be “fined” $6,500 anyway. So no matter where the employee gets his insurance he will still pay the full cost — part directly (out of pocket), and part in reduced wages.
The implicit health insurance tax this worker must shoulder is 26% of income!
Of course, it’s only in the long run that the cost of fringe benefits comes out of the pockets of workers. In the short run the employer may find it impossible or impractical to reduce wages by that amount. So for the near term, the employer faces a $6,500 annual tax for continuing to employ this worker and hiring others just like him. Massive unemployment is a predictable result.
Now, here is one more surprise. Imagine this worker’s income is lower and that he can qualify for Medicaid. In this case, if the employer fails to provide insurance, there is no fine. In other words, employers face no additional cost if they hire the poor, but they get really soaked if they hire the middle class!
There is no question about it. Obama’s mandates will materially harm our delicate economy and make this slow down far, far worse.
____________
Warner Todd Huston is a Chicago based freelance writer, has been writing opinion editorials and social criticism since early 2001 and is featured on many websites such as NewsBusters.org, RightWingNews.com, CanadaFreePress.com, StoptheACLU.com, TheRealityCheck.org, RedState.com, Human Events Magazine, AmericanDailyReview.com, and the New Media Journal, among many, many others. Additionally, he has been a frequent guest on talk-radio programs to discuss his opinion editorials and current events and is currently the co-host of “Life, Liberty, and the Pursuit of Conservatism” heard on BlogTalkRadio. Warner is also the editor of the Cook County Page for RedCounty.com.
He has also written for several history magazines and appears in the new book “Americans on Politics, Policy and Pop Culture” which can be purchased on amazon.com. He is also the owner and operator of PubliusForum.com. Feel free to contact him with any comments or questions : EMAIL Warner Todd Huston
Fair Use: This site may contain copyrighted material the use of which has not always been specifically authorized by the copyright owner. I am making such material available in my efforts to advance understanding of political, human rights, economic, democracy, and social justice issues, etc. I believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research, educational, or satirical purposes. If you wish to use copyrighted material from this site/blog for purposes of your own that go beyond ‘fair use’, you must obtain permission from the copyright owner.
Leave a Comment
If you would like to make a comment, please register to do so. I hate to do that but there are so many spam-bots out there that deleting spam comments would be a full time job if I were to just open it up for anyone without asking them to jump through a few hoops first.
You must be registered and logged in to post a comment. Anyone can register. No registrant's information is kept, used, or sold. CLICK HERE TO REGISTER
Social Networking
Help the Soldiers!
American Genius
Our Founding Ideas- The Declaration of Independence
- The Federalist Papers
- The U.S. Constitution
- Debates of 1787
- The Anti-Federalist Papers
- The Writing of John Locke
"Governments are instituted among men,deriving their just powers from the consent of the governed." Declaration of Independence July 4, 1776
Recently Written
Featured Sites
What THEY Say:
Foreign News In English
Illini Alliance
Blogroll
of Thinking
Political Parties
Contact Us
Email Publius' ForumArchives
Links
Other Blogs
MilBlogs
Religion
Gun Rights
Education
Separation of School
from State
Radio Hosts
| Blog: |
| Publius' Forum |
Topics: |
| Politics, News, Commentary |
