ObamaCare burdens states in three dangerous and damaging ways

Two-year anniversary of health care law nothing to celebrate

By Andy Matthews
  • Wednesday, March 28, 2012

This week, the Patient Protection and Affordable Care Act will celebrate its two-year anniversary before the U.S. Supreme Court. The controversial health care law finds itself in front of the highest court in the land after Nevada and 25 other states joined together to challenge its constitutionality.

After ferocious public debate and two years of implementation, the legislation still faces an uncertain fate — and the Obama administration still finds itself working to convince a majority of Americans that its signature health care reform isn't a bad thing. Current Gallup polling shows about three-fourths of Americans believe the law is unconstitutional.

According to the White House, individual liberty matters less than the law's big benefits, which are supposedly just around the bend. The view from the states, however, is decidedly less optimistic. The problems with the law are so severe its harmful effects must be enumerated.

The act imposes new burdens on states in three dangerous and damaging ways. First, it costs our businesses with new taxes. Second, it costs our residents with higher premiums. Third, it costs our states, threatening to reduce access to care for Medicaid recipients on the losing end of strained budgets. Tallying these cumulative economic burdens explains and justifies today's stubborn public opposition. Far from controlling costs, the law controls lives — even to the point of worsening them.

Consider the costs to businesses, which are already holding down employment in anticipation of new legislation. The Joint Committee on Taxation finds that the law will be responsible for a total of $400 billion in new taxes and fees in the next seven years. Even the Obama administration's own Department of Health and Human Services (via the Centers for Medicare and Medicaid Services) admits the law will push health care expenditures higher. Though the Obama administration continues to deny it, the calculus is simple: more health care spending equals more expenses on already-strapped businesses.

What about the impact on our fellow citizens? The law has raised, not lowered, premiums. Consulting firm Aon Hewitt estimates that premiums in the individual market are some 5 percent higher this year because of the health care law.

More is to come. In Wisconsin, a study by Gorman Actuarial and MIT's Jonathan Gruber — an adviser to the president on the Patient Protection and Affordable Care Act — sees an average premium increase of 30 percent. This will raise premiums for the 59 percent of individuals who aren't eligible for a tax credit by about a third. In Ohio, the accounting firm Milliman estimates that premiums in the individual market will increase by as much as 85 percent above current market rates.

Finally, the law wreaks havoc on our state budgets. In the first 10 years, it will increase Medicaid costs in the state of Nevada by $5.4 billion, according to the Nevada Policy Research Institute. A study by the Texas Public Policy Foundation finds that Medicaid spending in Texas will increase by an astounding $31.2 billion over the same span as people who currently qualify for Medicaid but opt out of the program are forced to enroll.

While the U.S. Supreme Court will also focus on the key issue of whether the law's individual mandate is constitutional, the law's devastating economic consequences cannot be ignored. Its intended reforms raise taxes, increase premiums and balloon budgets while businesses, individuals and states struggle to gain the upper hand on their finances.

Whether the Supreme Court finds it constitutional or not, this is one law America can't afford.

Brett Healy
The John K. MacIver Institute for Public Policy

Dr. Robert McClure
James Madison Institute

Tarren Bragdon
Foundation for Government Accountability

Joseph Lehman
The Mackinac Center for Public Policy

Forest Thigpen
Mississippi Center for Public Policy

Brooke Rollins
Texas Public Policy Foundation

Dann Mead Smith
Washington Policy Center

Jonathan Bechtle
Freedom Foundation

Jon Caldara
Independence Institute

Ashley Landess
South Carolina Policy Center
South Carolina

Andy Matthews
Nevada Policy Research Institute

Gary Palmer
Alabama Policy Institute

Update (3/28/2012): A draft version of this commentary was originally posted by mistake. This is the final version.

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