By Melody Himel Scalley
One of the goals of the Patient Protection and Affordable Care Act was to make insurance more affordable for small business. Instead, as is normally the case when the government tries to ‘fix’ something, the unintended consequences are typically far worse than the original problem. In this case, the health care bill promises to not only increase costs for business owners; but also to cost Americans the loss of much needed jobs.
The latest round of news has exposed another oversight in the bill. This one is in regard to tax credits and financial assistance to those who decide to purchase coverage through a federally sponsored health insurance exchange. The bill allows states to ‘opt out’ of state sponsored health care exchanges. In the event states opt out, the bill included language allowing the Federal government to set up an exchange for areas not served by a state sponsored exchange.
Congress included the ability to offer financial assistance for payments to state sponsored health insurance exchanges; however, in their zeal to ‘pass the bill so we could find out what’s in it’, Congress forgot to include similar language to subsidize costs to individuals purchasing coverage from federally sponsored exchanges.
We’ve been watching premiums rise since the bill was passed. The bill has already contributed to higher premiums for self-employed individuals. After companies drop coverage due to rising premiums; individuals who expected to receive cheaper health care may end up paying even higher costs as a result of the act! The Obama administration may attempt to fix this oversight through internal IRS rules instead of seeking the required authorization from Congress. This may yield yet a new flurry of lawsuits against the bill.
Study after study, and even the Congressional Budget Office (CBO), shows the Health Care bill costing more while accomplishing less. According to the CBO, the loss in American jobs could come as a result of not only employers cutting hiring; but also from individuals who quit their jobs and rely on the new entitlement to pay for their health care costs. Doug Elmendorf, CBO Director, gave testimony to that effect at a House Budget Committee hearing held earlier this year.
In just one example, Stryker Corp. recently announced plans to lay off 5 percent of its workforce ahead of 2013 as a result of the med-tech tax included in the bill. Whether we are discussing the billions in new taxes the bill creates or the myriad of other issues the bill raises –the outcome is the same: employers are facing higher expenses as a result of the bill. They will have to make up the costs associated with it by either cutting costs or raising prices. Many will choose to cut labor costs which will result in fewer JOBS.
Some employers have been granted waivers from the bill, but a large percentage plan to drop insurance plans altogether. Those that continue insurance benefits may choose to make up the difference by reducing pay or raising prices. Some may simply shut their doors or decide to move even more jobs overseas. We can add the health care act to the long list errors, oversights and unintended consequences which result from government interference into what should be personal responsibility.
Melody Himel Scalley is an entrepreneur and talk-radio show host in Virginia.
