Repealing Obamacare in the voting booth

Candidate Obama was, in 2008, fond of invoking Dr. Martin Luther King's Jr. "fierce urgency of now"admonition to argue that "we are at a defining moment in history" and, therefore, cannot afford to wait to fix our health care system (among other things). Interestingly, his decision to ram through the unpopular Affordable Care Act two years ago has put us at a new defining point.

If Barack Obama is re-elected, it is game over for the U.S. health system as we know it. Once this deeply flawed law is firmly embedded through a vast thicket of regulations and taxes, it will be impossible to eradicate. Indeed, behind the scenes, this administration has been preparing a "torrent" of new Obamacare regulations to be put into effect before Inauguration Day.

That the U.S. health system needed reform was never in doubt. However, that government-run health care was the answer was never in doubt only in the minds of progressives.  And there is no doubt that Obamacare puts us firmly on the path towards government-run health care.

For any voter who cares about the economy, Obamacare is a disaster. Between its hundreds of billions in new taxes and mandates on employers, its full implementation puts more than 1 million jobs at risk. Worse, the incentives created by the employer mandate will accelerate the disturbing trend of the past 5 years that has moved us in the direction of a part-time, low-wage workforce. Even though the mandate will not kick in until 2014, we have already seen major employers in service industries such as restaurant making a strategic calculation to limit their employees to only 29 hours a week to avoid getting trapped by this mandate into providing an expensive fringe benefit equivalent to increasing the minimum wage by more than $2 an hour.[1]Sadly, the biggest losers under ACA will be the least educated and least skilled workers in society.

Moreover, in the long run, the key to American prosperity is to grow the private sector faster than government. But President Obama has put us on a path to increase the size of the federal government by more than 40 percent over the next 75 years. Every penny of that increase can be attributed to growth in health entitlements: Medicare, Medicaid and exchange subsidies.

How bad is the situation? The combined debts and unfunded liabilities of federal, state, and local governments currently amount to $279 trillion.[2] This amounts to $886,000 per American or $2.4 million per taxpayer.[3]No amount of taxing "the rich" is going to appreciably lower these figures to more affordable levels.

Medicare was already massively underfunded, yet the president elected to divert $716 billion out of the program (in just the first 10 years) to help bankroll a new entitlement designed to ensure his place in the history books. This decision will have devastating consequences on access to care for Medicare beneficiaries-making them far less desirable than Medicaid recipients to the average doctor. More likely, we will avert those draconian cuts to Medicare, which will merely accelerate the pace at which we drive off the long term fiscal cliff. Only massive reform of Medicare can avert this; yet, despite his 2008 campaign pledge to do so, the president after 4 years in office has yet to offer a plan for entitlement reform.

Medicaid is another government-run program that is as much in need of reform today as it was when created more than 50 years ago. When compared to private insurance or Medicare, Medicaid is the least desirable form of coverage; yet, Obamacare intends to shovel millions more hapless beneficiaries onto this badly broken program.

Because the president firmly believes government experts make better choices than people can make for themselves, tens of millions of workers will end up losing the coverage they like in favor of more expensive coverage dictated by bureaucrats. Worse, the HHS contraception mandate requires all employers-even those with moral objections, such as Catholic hospitals and universities-to provide employees coverage for abortion pills, contraceptives, and sterilization procedures. The Founding Fathers would be aghast at this flagrant assault on First Amendment religious liberties. It is one thing to allow women to choose abortions-as Roe v. Wade does. It is quite another to require individuals through taxes or forced premium contributions to bankroll these against their conscience and their will.

My greatest fear is what Obamacare will do to incentives for medical innovation. Remember that President Obama got only half a loaf from the perspective of progressives. They much preferred a single-payer health system and with its attendant replacement of market forces with command and control directives issued from Washington, D.C. In the words of one regulatory expert:

If President Barack Obama is re-elected, ObamaCare's controls over doctors, hospitals, pharmaceutical firms and other providers of medical care will be tightened, and the operations of private insurance companies will be progressively restricted.

Those skeptical of this claim might look at the sweeping regulatory powers just enacted in Massachusetts just five years after enactment of its health reform, as these are a harbinger of the kinds of government controls President Obama is likely to seek once it becomes clear how quickly Obamacare's costs spiral out of control.

Obamacare is so bad that Ohio voters last year voted by a two-to-one margin to exempt themselves from its mandates. If Ohio truly is a bellwether for the nation, perhaps there is a lesson in this.[4] It at least gives me hope that voters are smart enough to do the right thing when it comes to Obamacare.

Governor Romney has promised to issue a 50-state waiver from Obamacare on his first day in office and then seek a formal repeal and replacement. There's only one way to stop this misguided law: by defeating a president bound and determined to see it survive. But that is not enough. After all, divided government won't repeal Obamacare. This is why today it is essential that voters not only cast ballots for the Romney-Ryan ticket, but give them a House and Senate bold enough to reverse engines on our Titanic health entitlement state before it hits the iceberg.[5]

Footnotes

[1] The most authoritative annual survey of employer health benefits, conducted by Kaiser Family Foundation, shows that the average premium for employees in 2012 was $5,615. For a full-time employee working 2000 hours, this amounts to $2.80 hourly. The average premium for family coverage was $15,745, or $7.85 hourly. The current minimum wage is only $7.25 hourly. Thus, even if employers could manage to find coverage at half the average premiums for their workers at or near minimum wage, the Obamacare mandate is roughly equivalent to a 19 to 54 percent increase in the minimum wage. If employers instead elect to pay the fine of $2,000 per worker, this is still equivalent to a 14 percent increase in their wage compensation.

[2] This figure includes all federal debt ($16.2 trillion), state and local government debt ($2.8 trillion), and unfunded liabilities over the next 75 years for the federal government ($222 trillion) and state and local governments ($38 trillion). Debt represents money already spent and owed, whereas unfunded liabilities represent the difference between promised spending and projected revenues based on current policy, i.e., assuming no changes in commitments or taxes. Note that current debts are not included in estimates of unfunded liabilities since the latter occur in the future. Most readers are familiar with the unfunded liabilities related to Medicare and Social Security, which currently amount to $121 trillion, according to the U.S. Debt Clock. This includes $105 trillion in combined liabilities for Medicare (Parts A and B) and Medicare Part D (prescription drugs), plus $16 trillion for Social Security. 

These figures are calculated using projected revenue and outlay figures from the CBO's alternative fiscal scenario, which is the most accurate estimate of the likely path of U.S. spending and revenues absent fundamental changes in policy. However, other budget experts have performed a parallel calculation (using the very same CBO alternative fiscal scenario) to determine the mismatch between promised spending and projected revenues for all federal government programs (not just entitlements), concluding that the current amount of U.S. unfunded liabilities is $222 trillion. As one example, Obamacare alone added $17T in unfunded liabilities related to Medicaid and new Exchange subsidies (figures that are not included in the Debt Clock version of unfunded liabilities). Thus, health entitlements account for $122 trillion of the $222 trillion in unfunded federal promises (55% of the total).

There is another $38 trillion in state and local unfunded liabilities calculated in a similar fashion.

[3] This is based on a U.S. population of 314.7 million reported at the U.S. Debt Clock. Using their figure of this amounts to roughly $3 million per family (U.S. Debt clock shows 85 million families).

[4] Ohio is far from alone: 16 other states that have already passed laws or made changes to their constitutions to say they will not enforce the so-call "individual mandate" in the law. And Alabama, Florida, Montana and Wyoming all have similar ballot measures to be acted upon today.

[5] I strongly encourage anyone who does not find my argument convincing to read similar pleas by Chris DeMuth ("Which direction voters choose on Tuesday will have profound consequences for the cost, quality and availability of health care in America."), Ann Coulter ("The single most important issue in this election is ending the national nightmare of Obamacare."), David Catron, ("The only way to kill this monster is full repeal, or Investor's Business Daily ("But unless voters defeat Obama on Tuesday, they'll never get rid of his disastrous ‘reform.'"). And, for all intents and purposes, tomorrow offers the last chance to set that process in motion.").This is a hugely consequential election. The choice could not be more clear.

 

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Christopher J.
Conover

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