The Hidden Costs of ObamaCare

Remember when Speaker Pelosi said we need to pass this bill to see what is in it? When President Obama said that once HRC became law and the public actually saw what the bill would do that we would like it? Well, now that ObamaCare is the law of the land more people are delving into exactly what it entails. Yes, there is some objective good in this bill, but at what cost?

The bill's stated cost is $938 billion over 10 years. But does that include the financial hit already taken by large companies across the nation, in this, just week one of ObamaCare? AT&T said it will take a $1 billion charge due to Obamacare. Earlier this week, Caterpillar took a $100 million writedown. Caterpillar provides generous drug benefits to retirees, largely due to tax-free subsidies; that program now will be taxed. Deere says it will take a $150 million hit, and AK Steel $31 million. If this is the blood drawn in week one, imagine the cumulative effects of a year. $938 billion seems like wishful thinking.

Aside from the simple market economy effects of this bill there is also an approximately 15 million pound gorilla in the room. Democrats are widely believed to be pushing for amnesty for illegals. Regardless of where you stand on this issue, adding another 15 million uninsured into the pool will jump the price tag of ObamaCare considerably.

But wait, isn't this bill supposed to be paid for by taxing the rich? They can afford it right? Well, yes and no. Everything has consequences. America has more millionaires per capita than just about every other nation, and all those people effect the economy. Trickle down economics has a bad name right now, but that doesn't mean it's core principles are in error.  According to a recent study ObamaCare will cost an extra $46,000 in taxes for a person who earns $1 million a year.  Of course that one million is really $500,000 after-tax. A $46k tax is basically 10%. In a world where everything is relative 10% is a huge chunk of income. This means $46,000 less will be spent on other items that lead to more jobs.

Democrats may have meant well when they passed this bill but they have grossly miscalculated both the short term and long term effects on our economy.

Crossposted at The Moderate Republican.

About SteveB

  • Vote3rdpartynow

    The ink wasn’t even dry yet on the health care reform law, and already Obama was pushing to make legal some 15 million illegal aliens.  This is the most outrageously left wing agenda I have ever seen.  Obama must be stopped.

  • This weekend’s Parade magazine, found in the Sunday Globe but appearing in Sunday papers all over the country, lays out the national debt issue for laymen to understand. If we quote Parade in the future, who can argue with us?

  • nomad943

    Democrats may have meant well

    I sincerely believe that the intent is malicious. If not, then what happenstance series of coincidence caused them to systematically eliminate any possibility of actual cost control? This is no coincedence.

  • You have a group of people that have never run a business in charge of the country.

    I believe most of the folks in the White House to be smart people.  That does not, however, equate to being able to run a business, meet payroll, find customers, etc.

    What we had was an incentive for companies to provide a benefit to their retirees that otherwise would be provided by the government.  If the private sector company provides the benefit it costs the government 28% up to a maximum of $1,330 in annual incentives to the company (I have heard the average incentive is around $600).  If the government provides the benefit under Medicare it costs the government around $1,900 a year.

    Simple economics would seem to dictate that paying $600 is a heck of a lot easier than paying $1,900.  Yet, the HCR bill eliminates the incentives and counts this as a “savings” without any incorporation of the concept that companies might just walk from the drug benefits putting the total amount on the government.

    So instead of a savings from the eliminated incentives we will have:

    1) Increased medicare costs as companies shift retirees from company plans to Medicare.  Anyone who does not think this will happen only need to look at municipalities, including Boston, that are mandating that their retirees go on Medicare rather than stay on private insurance provided by the municipality.  If the local government can see that this saves them money you can bet the private sector companies will as well.

    2) Layoffs in response to the charges as companies respond to the short term costs before they can move their retirees to medicare.

    3) People scratching their heads wondering what else was “missed” in estimated the costs of this bill (My simple answer is LOTS).