Ricardo Alonso-Zaldivar of the Associated Press claimed last week that Obamacare would benefit Texas tremendously, noting that “close to 4 million Texans stand to gain coverage under the law.” But considering how many of Obamacare’s promised benefits have not materialized, I wonder if the law will benefit Texas at all.
When he was selling his health care reform law to the American people, President Obama made numerous promises. We were assured that small businesses would receive tax credits to offset the law’s premium costs; that Medicare would be protected; that the law would cost under $1 trillion over 10 years; that people would be able to keep their current insurance plans; that insurance premiums would be reduced; and that health care costs would stop rising. However, all of these promises have been broken — and the law is not even fully in effect.
President Obama promised small businesses that they would receive tax credits to help alleviate the large premium costs in the bill. The Small Business Tax Credit is supposed to be the primary tool for doing this. But not only is the tax credit uselessly small — the Congressional Budget Office (CBO) estimates that it will only affect 12 percent of people in the small-group market — but it ends in 2017.
President Obama promised seniors that their Medicare plans would be protected. But Medicare’s chief actuary, Richard Foster, has revealed that Medicare is anything but safe. Between 2014 and 2023 — the first 10 years of Obamacare’s full implementation — Medicare Part A and B will be cut by a combined $1.05 trillion under the law. Foster has also revealed that reductions to Medicare Advantage, the popular private supplemental insurance that almost one-quarter of Medicare beneficiaries enroll in, will cause almost half of current Advantage enrollees to lose their plans.
In order to ease voters’ debt concerns, President Obama assured Americans that Obamacare would reduce the deficit and cost under $1 trillion over 10 years. The CBO produced a report suggesting that the president was right. But that report is flawed: It uses a 10-year window that includes four years of preparation for the law and only six years of its actual implementation. Shift the 10-year window back one year — three years of preparation, seven years of benefits — and Obamacare’s cost jumps to $1.4 trillion. In fact, the CBO says a full repeal of Obamacare would reduce the budget deficit by $540 billion over the next 10 years.
President Obama emphatically promised, “If you like your coverage, you can keep it, no matter what.” But that’s not true either. The restrictions on cost-sharing adjustments leave companies and individuals with little flexibility to change plan details without losing their grandfathered statuses. The administration estimates that between 49 percent and 80 percent of small-employer plans, between 34 percent and 67 percent of large-employer plans and between 40 percent and 67 percent of individual plans will not be grandfathered by 2014.
President Obama also promised that premiums wouldn’t rise under Obamacare. The law, we were told, was going to lower premiums for families by as much as $2,500. The Agency for Healthcare Research and Quality analyzed the ten largest states’ average premiums in 2010. On average, the premiums for a family plan rose 6.5 percent. Here in Texas, the average premium for a family plan jumped by more than $1,000.
Ending the rise in health care spending? Before Obamacare was passed, the Centers for Medicare and Medicaid Services estimated that national health care spending would rise by 6.1 percent per year over the next decade; after the law passed, its estimates climbed to 6.3 percent per year. Obamacare increases health care spending instead of curbing it.
Since its passage, Obamacare has produced little besides broken promises. It is time to repeal Obamacare and give the nation health care reform that delivers real results.
Spencer Harris is a policy analyst for the Center for Health Care Policy with the Texas Public Policy Foundation, a non-profit, free-market research institute based in Austin. He may be reached at [email protected].