Going Out of Business: How ObamaCare will Hurt American Businesses [accurate predictions from 2009]

Heritage Foundation ^ | September 23, 2009

[grundle]

A Costly Employer Mandate

It's a Regressive Tax:The House and Senate draft proposals for health care reform include employer mandates that require employers to pay higher taxes (as much as an 8% payroll tax) if they do not offer health insurance or if they offer it but some employees decline it and use the government system. The result of such a tax penalty will cause lower pay and job losses, especially for low-income workers.

By the Numbers: According to The Heritage Foundation, the mandates could cost businesses up to $49 billion a year, 10.2 million workers will be at risk of slower wage growth and cuts in other benefits, and as many as 9 million low-wage and part-time workers will lose their employer-based health insurance.

Mandates Kill Jobs and Lower Wages: The result of such a tax penalty is lost jobs and lower wages, especially among low-income workers. Businesses are forced to make up lost revenue or pass these costs onto consumers. Either way, the cost is covered by the American worker.

Increasing the Cost of Private Health Insurance

The "Public Option": Employers and their employees will likely bear the costs of any new "public plan" through an increase in private insurance premiums. Historically, government health plans reimburse providers below cost. These below-cost payments are in part offset by private payers, creating a massive cost shift.

Major Cost Shifts: A study by the actuarial firm Milliman calculated that public programs, such as Medicare and Medicaid, currently shift $88.8 billion in costs onto private payers per year, increasing the typical American family's annual private health insurance premium by $1,512. Can you imagine the cost shift if 103.4 million more Americans were on a government plan?

More Regulation: New health insurance regulations will cause insurance to be more expensive for employers and require costs for employers to comply with the new regulations. The bills pending in the House and Senate include provisions that would result in sweeping, complex, and highly discretionary new federal regulation of health insurance.

The Health Commissioner: Under the House bill, a new health commissioner would have the authority to conduct audits and assess penalties on both commercial insurers and employer-sponsors of plans that fail to comply with the new federal requirements. So any employer offering health insurance can expect to be harassed and even fined by federal bureaucrats seeking to determine if it is in compliance with federal rules micromanaging the operations of its plan.

Creating a Poor Environment for Economic Growth

A "Surtax" on Small Businesses: The House proposal institutes a "surtax" on top of ordinary taxes to help pay the bill. Joint-filing taxpayers or small businesses making over $350,000 (or $280,000 individually) will be forced to pony up an additional 1% of their income or profits, and those making more would be taxed up to 5.4%. Coupled with the expiring Bush tax cuts, these plans would raise the top marginal tax rate in the U.S. higher than most European countries, including France, Germany, and Spain.

High Taxes: In a global race for capital, income tax rates that are higher than all but a few of the highest-tax countries will be a further hindrance to the ability of the U.S. to attract new investment, entrepreneurs, and businesses. In addition to damaging our international competitiveness, the surtax would surely worsen the recession. Not a single economic school of thought advocates raising taxes during a recession or threatening to do so in its aftermath. To call for tax increases during the largest recession in 70 years is downright reckless.

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Long before Obamacare was passed, critics pointed out that the law contained incentives for employers to reduce their number of full time employees to less than 50 - either by firing some of their employees, or by reducing their weekly hours to less than 30. Supporters of Obamacare dismissed these concerns. But as we see now, there have been many examples of this prediction coming true.

[CyberAnt]

I keep getting the thought that perhaps ObamaCare was never supposed to work ..??

Because if, in the next year or so, it is determined that it’s just too complcated to work .. it will be a perfect segway into “single-payer” healthcare. Which is what Obama wanted anyway.

Comments anybody ..??

[Obama_Is_Sabotaging_America]

0bama’s mission is to eradicate the private sector and his every action (and lack of) speaks to that. And the Republicans in Congress approve. Those bastards.

[sarasmom]

“They”, all the highly paid elected officials said that was the ultimate goal.

Government employees are, of course, exempt.

[Graewoulf]

Impeachment File on B. Hussein Obama, aka Barry Soetoro.