Three years ago, Democrats in Congress rammed through ObamaCare, against the wishes of a majority of Americans. Never before had such a major piece of legislation been enacted with no bi-partisan support and in the face of such overwhelming opposition in the polls. Then-Speaker Nancy Pelosi tried to reassure the public by stating that we just needed to pass the bill to find out “what’s in it.” This year and next, we will find out “what’s in it.” It won’t be pretty for Democrats.
Democrats have already paid a stiff price for ObamaCare. Just months after passage, they experienced historic election losses up and down the ballot. Republicans won over 60 seats in the House, and yet, the political climate was such that even this gain was probably an underperformance. At the state level, they swept state legislative seats, giving them a strong position to shape redistricting, which will likely ensure a House majority for a decade.
ObamaCare was not the issue many conservatives thought it would be in 2012. There are two basic reasons for this. First, Mitt Romney was the godfather of the provision that most angered people about ObamaCare, i.e. the individual mandate. With the strong backing of the Heritage Foundation, he had pushed a similar law through Massachusetts in 2005. The second reason, though, is more fundamental: most of the provisions of ObamaCare didn’t kick in for years.
Riddle me this: If passing ObamaCare was such a moral imperative, why did most of its provisions not take effect for four years? Why did the Democrats push back most of the far-reaching provisions until after Obama’s reelection campaign? Perhaps they really did know “what’s in it” before they passed it.
At the start of 2013, new taxes tied to ObamaCare came into force. There is a new excise tax on medical devices, an elimination of the deduction for employers costs to provide drug coverage to certain employees, a limit on the deduction for medical expenses, higher payroll taxes for certain earners and a limit on the amount of money Americans can put into Health Savings Accounts. All told, the new taxes, so far, amount to at least $260 billion over the next decade.
Later this year, provisions that reduce the amount Medicare reimburses some providers for services will take effect. Government uniquely holds the view that it can unilaterally pay less and expect the same level of services. Also, the government will finalize regulations about which services are required to be covered in health insurance policies. This is the most unappreciated aspect of ObamaCare. Over the years, the government will continually tweak insurance mandates, driving up the costs and magnifying the ripple effects to the insurance markets.
In nine months, the full effects of ObamaCare will come into force. Starting January 1, 2014, all Americans will be required to carry health insurance, or pay a special tax. All employers with more than 50 employees will be required to offer health insurance coverage or pay their own special tax. Also, on this date, federal-state “exchanges” to purchase health care are supposed to come on-line.
All the ERISA lawyers in the world, together, don’t understand yet how this will play out. Corporate sources have informed Breitbart News that a number of companies are considering just dropping health insurance benefits altogether. This is especially likely as the federal government is expected to steadily increase the regulatory requirements on employer-provided benefits. The advent of the exchanges and the implementation of ObamaCare may provide just enough justification to eliminate the benefit.
In the months following this change, the federal government will continue to ratchet down the amount it reimburses Medicare and Medicaid for medical services. Also, in the coming years, states that accepted ObamaCare’s expansion of Medicaid will have to shoulder a larger portion of the financial burden.
Health Care politics may have paused with the passage of ObamaCare. They are about to begin anew.
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