8 Lies in the President’s Healthcare Reform Proposal

Verum Serum

Most of these are not new, but if the White House is going to use the media spotlight on healthcare reform this week to repeat many of the same lies and half-truths, then it is incumbent on someone to point them out once again.

8. Small business taxes will not go up to pay for the cost of the uninsured. It depends on what the definition of a small business is. The President’s proposal defines this as any business with less than 50 employees. Any business with 51 or more employees which does not provide insurance will be required to pay a fee of $2,000 per worker if any of their employees receive subsidized coverage in the government insurance exchange (although the President’s proposal does except the first 20 employees from this calculation). In addition, any small business owner who earns more than $200,000 per year will be required to pay an additional .9% in payroll taxes for Medicare, and a brand new 2.9% tax on unearned income (interest, dividends, etc.).

7. ObamaCare will lower premium costs for the individual (non-group) market by “14 to 20 percent”. As detailed in my earlier post, the CBO reported that these premiums on average will increase by 10 to 13 percent, and for families who obtain coverage directly they will actually increase on average by 16%, or $2100 per year by 2016.

6. You will be able to keep your doctor if you are on Medicare. Only if your doctor does not opt out of participating in Medicare as a result of health reform, a possibility the government is keenly aware of since the Center for Medicare Services continues to extend the 2010 deadline for physicians to opt out based on the uncertainty over the health reform legislation. The recent, albeit limited, Medicare/Medicaid opt-out by the Mayo Clinic is likely a harbinger of things to come.

5. The President’s proposal will reduce the deficit by $100 billion over the next decade, and $1 trillion in the next. Not exactly sure how the White House can make this claim given that the CBO has not and will not score the President’s proposal. These figures seem to be based on the CBO’s score of the Senate bill, but the President’s proposal provides for more generous individual subsidies, increased federal coverage for Medicaid, and reduces the income generated from the so-called “Cadillac tax” – all of which will greatly add to the cost of the bill.

4. Nothing will change if you currently receive insurance coverage through an employer. True enough so long as your employer does not opt to drop health insurance coverage for its employees completely. But according to the CBO this is exactly what will happen to 8-9 million people under the Senate bill. And given the relatively weak employer mandate, I have a feeling the CBO grossly underestimated this total.

3. Medicare benefits will not be cut. The CBO Director directly contradicted this claim while testifying before Congress back in September, a fact which even the White House seems to acknowledge by clarifying that only “guaranteed” Medicare benefits will not be cut. This hair-splitting by the White House will mean little to seniors who lose benefits they currently receive through Medicare Advantage plans.

2. If you like the insurance you have, keep it. Unless you have a Medicare Advantage plan (see #3). Or unless your employer drops your coverage (see #4). Or unless you have a high deductible plan paired with a Health Savings Account (HSA). And if the Democrats use reconciliation to revive the public option as threatened – which notably the President is not opposed to – then we are ultimately all moving to single payer.

1. The President’s proposal represents the “largest tax cut for health care in history”. This one IS new and it is my personal favorite. I suppose it’s true insomuch as no one else has ever had the gall to spin the creation of a $2+ trillion entitlement program as a “tax cut”. Personally I think the fact that the President proposes to provide tax-payer funded subsidies to families earning up to $88,000 the most fiscally irresponsible aspect of the entire plan. Coming a close second is the fact that over half of the cost of these “tax cuts” will be funded from reductions in Medicare spending, when Medicare itself faces insolvency within the next 10 years. If the White House wants to tout these subsidies – funded largely at the expense of seniors – as a “tax cut”…then I say go for it.

In the now immortal words of Congressman Joe Wilson, President Obama:

You lie.


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