Providing every American with access to health care is a laudable goal. Unfortunately, during the debate over the Patient Protection and Affordable Care Act — otherwise known as “Obamacare” — the politicians and media lost sight of this goal and became distracted by news-bite accusations about “death panels,” government paying for abortion and doctors cutting off legs for large fees. The result was a bloated, unfocused, confusing and indecipherable bill that even a year later continues to shock us with its costs.
As I detail in my recent book, “The Comeback: How Innovation Will Restore the American Dream,” the costs of Obamacare were never honestly analyzed or conveyed. Instead our political process produced a hurriedly passed, massive bill that few if anyone understood. (Indeed, urging a quick vote, then-Speaker Nancy Pelosi candidly declared that the bill had to be passed so people could learn what was in it.) Sadly, it is worse than I could have ever imagined and this law will increase government spending, cost jobs and undermine our ability to emerge from the economic downturn.
Healthcare works best when the government ensures that those who use a service have some role in paying for it and those who provide the service have incentives for innovation and controlling costs. The new law instead has created a perverse reward system not for innovators — but for lawyers. A new Health and Human Services (HHS) report provides explicit dollar figures on how a relatively small group of well-healed and savvy entities will receive large amounts of taxpayer cash under the new law. Congress allocated $5 billion through 2014 to help early retirees with health care, but it appears that a tiny fraction of eligible entities jumped in and scooped up the cash. In other words, the $5 billion is spoken for and HHS has stopped accepting new applicants almost three years earlier than expected.
The breakdown of who received the cash is even more maddening. According to the HHS report, the United Auto Workers, one of the nation’s largest unions, received the most ($207 million), but connected companies like Deere ($8.7 million), UPS ($12.3 million) and the pro-Obamacare Washington Post ($573,000) also received payments. I doubt many legislators even knew they were voting to give these entities taxpayer money, assuming they were able to read the 2,000-page bill in the few hours they were allowed before voting on it.
Another even more devastating report vastly increases the estimates of economic harm the law will cost. The Congressional Budget Office (CBO) recently reported to Congress that the law will cost $1.13 trillion over the next six years rather than the initial cost of $778 billion. The CBO still maintains that the law will cut the projected deficit, but to make this statement the CBO uses really unlikely assumptions. For example, it assumes corporations will provide huge revenue from penalties and fines. It also assumes some $350 billion in Medicare savings based on decisions from a 12-person commission that will make decisions on how to cut Medicare costs. Somehow this commission will do what Congress lacks the political will to do.
Obamacare also includes costs that weren’t included in the original estimates. For example, the CBO says it will cost the IRS and HHS each between $5 billion and $10 billion to implement the law over the next 10 years.
This is the tragic but likely result of how Obamacare was deceptively passed. Its soaring cost and job-killing provisions will vastly outweigh whatever good might actually come from it. It avoided tough choices and shared responsibility. It ignored America’s record as the world’s best at providing health care and helping those with life-threatening conditions. It will force doctors, including an overwhelming number of highly trained specialists, to retire. And it will make it difficult for doctors to have independent offices.
Obamacare must be replaced. When it is, let’s hope our elected leaders remember what it is voters are asking them to do: Allow innovation that will keep Americans healthy, give them choices, lower costs and improve care.
Gary Shapiro is the president and CEO of the Consumer Electronics Association and the author of the New York Times bestseller, “The Comeback: How Innovation Will Restore the American Dream.”