I have gleaned the following from the ObamaCare package signed into law yesterday.
Most of the mandates, Medicare cuts and taxes will not take effect until 2014 or later. The gross cost of the bill $940 billion over ten years–but almost $40 billion of that comes in 2019.
$17 billion in the first four years, while the remaining $923 billion, or 98 percent, is spent in the next six years.
Congressional Budget Office (CBO) says less than $1 trillion over 10 years. But when all spending and offsets are properly accounted for, the true cost skyrockets to over $2 trillion . The oft-quoted $940 billion number only pertains to the cost of expanding coverage —— but it does not include all other costs, such as the providing more Medicare prescription drug subsides, which costs about $38 billion.”
A family of four with the national average income of about $70,000 (at 317% of the poverty level of about $22,000) would have their spending capped at 9.5% of income, which would be about $6,650. Taxpayers would pick up the other half of the cost of the insurance. The Congressional Budget Office estimates that 18 million people would take advantage of the exchange to obtain subsidized health insurance. However, if employers that currently offer health insurance drop their coverage in order to save $8,700 per employee ($10,700 less the $2,000 penalty for employers with more than 50 employees that do not provide coverage) and shift that cost to the taxpayer, the number of people getting subsidized health insurance could surge well beyond the budgeted 18 million. After all, there are 127 million people with incomes between 150% and 400% of the federal poverty level.
Estimates of the costsof Obamacare are very, very low. When Medicare was instituted in 1965, it was estimated that the cost of Medicare Part A would be $9 billion by 1990. In actuality, it was seven times higher — $67 billion. Similarly, in 1987, Medicaid's special hospitals subsidy was projected to cost $100 million annually by 1992, just five years later; it actually cost $11 billion, more than 100 times as much. And in 1988, when Medicare's home-care benefit was established, the projected cost for 1993 was $4 billion, but the actual cost in 1993 was $10 billion.
States which have instituted ObamaCare-like programs in recent decades have seen their average insurance premiums skyrocket: In Kentucky, for example, average premiums shot up an astounding 36-165 percent after a 1994 government-managed reform measure was passed, Washington state residents saw a premium increase of up to 78 percent as a result of a similar program. State-managed care in Massachusetts has led to the most expensive average family plans in the nation.
A 40 percent excise tax on insurance plans costing $10,200 for individuals and $27,500 for families.
The bill also imposes new taxes on drug makers, medical device manufacturers and health insurers that are likely to be passed on to consumers.
When you sell a home a 4% tax will be levied on your proceeds from the sale will go to cover Health Care costs.
If you frequent tanning salons, you will pay a 10% excise tax.
If you purchase a wheelchair or other medical devices, you will pay a 2.3% excise tax.
A 40% tax on health benefits happens in 2018 and applies to premiums exceeding $10,200 a year for individuals and $27,500 for families.
If you itemize your tax returns, the deductible for medical expenses will change. You will only be allowed to deduct medical expenses in excess of 10% of your adjusted gross income. Currently that number is 7.5%.
In 2013 Families with incomes greater than $250,000 will pay a higher (0.9 higher) Medicare Payroll Tax up to 2.35 percent,
There is a new 3.8 percent tax on interest and dividend income
Starting in 2018, "Cadillac" insurance plans will be taxed -- individual polices over $10,200 a year and family plans over $27,500. The way the tax is "indexed," in time it'll cover more and more Americans -- just as the Alternative Minimum Income Tax, first targeted at the super-rich, now hits millions in the middle class.
Required to purchase insurance or pay a fine. Individuals who do not have insurance will be forced to pay a 2.5 percent “health insurance” tax penalty.
Younger consumers will bear the greatest burden, with premiums costing more than triple their current rates.
The incentives for younger and healthier individuals is to pay the cheaper mandate penalty rather than buy the more expensive government required health insurance, knowing that they could always sign up later under the guaranteed issue rule.
Can be covered under parents’ program until age 26.
The Medicare program will see $500 billion in cuts to its program along with the Medicare tax being raised.
Tax on medical devices.
Tax on dividends and interest.
Elimination of Medicare Advantage. The approximately 4 million Medicare beneficiaries who hit the so-called “doughnut hole” in the program’s drug plan will get a $250 rebate this year. Next year, their cost of drugs in the coverage gap will go down by 50 percent. Preventive care, such as some types of cancer screening, will be free of co-payments or deductibles starting in 2010.
An insurance mandate requiring all employers to provide health insurance or pay an 8 percent payroll tax penalty.
The penalty employers face for not offering coverage $750 a person.
If employers did offer coverage, but the employee-paid portion accounted for a larger percentage of a worker’s income than deemed acceptable by the bill, the worker would be eligible to drop out of employer-sponsored insurance and obtain a subsidy to buy insurance in the exchange instead.
The employer would pay a $3,000 fine for every worker that bought insurance in the exchange, capped at one-fourth of the workforce.
It may be more beneficial to not offer insurance at all, much to the detriment of employees who would not be eligible for subsidies in the exchange.
All the health bills before Congress depend on a massive Medicaid expansion. If Congress raises eligibility to 133% of the federal poverty level, 33 states would see their Medicaid populations increase by 30%, and 10 states would see their Medicaid populations jump by 50%
In many states, the Medicaid program only covers a portion of those living below the poverty level. For these states, the requirement to cover all those in poverty and then 50% more will cause enormous increases in taxes. In Arkansas and Louisiana, the cost could exceed $1 billion for each state each year.
The IRS will need to collect an additional 10 billion dollars in taxes over the next 10 years. Nearly half of all these new mandated taxes on individuals will be paid by Americans earning on average less than $66,150!
The IRS will need to hire 16,500 new employees to audit, investigate, and collect billions in new taxes.
These new IRS workers will have to verify that you have “acceptable” health care coverage. When audited the burden will be on you to prove that you have purchased the “minimum essential coverage”.
Under the enforcement process your bank accounts and tax returns will be used to pay the non-compliance fines. To enforce compliance the IRS will have the authority to fine you $2,250 or 2% of your income if that is a larger amount.
Health Care providers:
Doctors and hospitals will receive less compensation than they do now to control revenue streams.
Doc fix for medicare is likely not to be supported. If it is then bill costs $260 billion more over 10 years.
Bonus Hayek Quotation of the Day…
8 hours ago