As this slide-show depicts, subsidies provided through ObamaCare for lower- and middle-class workers who receive health-care through the government-run exchanges would be much greater than the tax-breaks provided to lower- or middle-class workers who receive employer-provided health insurance. This would lead employers to drop these workers’ insurance and let them be covered through the exchanges, at taxpayer expense. Thus, ObamaCare is not only a new health-care system but a new welfare and tax system, which would lead to the segregation of the labor market: upper-income workers would continue to get insurance through their employers; lower- and middle-class workers would eventually get it through the government.
WellPoint estimates that, under ObamaCare, insurance premiums for younger, healthier people would more than double in the individual markets in California, Colorado, Connecticut, Georgia, Indiana, Kentucky, Maine, Missouri, Ohio, Virginia, and Wisconsin.
Richard Epstein examines Supreme Court precedent in rate-making cases and concludes that, even apart from the question of whether the health-care overhaul is an unconstitutional extension of Congress’s power to regulate interstate commerce, it is unconstitutional under the takings and due process clauses of the Fifth Amendment. According to Epstein, the Supreme Court’s “basic constitutional requirement” in this realm is that “any firm in a regulated market must be allowed to recover a risk-adjusted competitive rate of return.” Because the Reid bill (which, in connection with the Reconciliation Act, became law) sharply limits health insurers’ ability to raise premiums or deny applicants, it “emphatically fails this test” — as there is a “near mathematical certainty” that it would drive insurers out of the individual and small-group markets.
ObamaCare would impose higher implicit marginal tax-rates on lower- and middle-class workers than on millionaires, thereby penalizing work and providing a barrier to upward mobility. Under the Senate bill (which, along with the Reconciliation Act, became law) those making $14,560, who make another $560, would be $200 worse off than if they hadn’t made that extra money at all; those making $12,000 would pay implicit marginal tax-rates of 66 percent on the next $5,000 earned; and people who make between $30,000 and $100,000 would pay implicit marginal tax rates of over 50 percent. Disincentives for work would be coupled with rewards for dropping insurance, as those who drop insurance, picking it up again only when sick or injured, could save as much as $8,000 a year.
Under Obamacare, getting married would cause couples to lose large amounts in insurance exchange subsidies. Depending on their ages and incomes, married couples would lose up to three-quarters of their exchange subsidies and up $10,425 a year that would be available to couples who simply live together.
The actual 10-year costs of Obamacare are about two-and-a-half times the tally that the Democrats are claiming.
Through a variety of restrictions, requirements, prohibitions, and taxes, ObamaCare would — as if by design — seriously hinder, if not altogether kill, HSA plans — despite the promise they have shown as a tool for lowering health-care costs
Subsidies in ObamaCare’s government-run insurance exchanges would dwarf tax-breaks for employer-provided insurance, with many families in the exchanges getting $10,000 more in subsidized coverage than families of identical size and income with employer-provided insurance would get in tax breaks. This would likely lead to far more people finding ways to jump to the exchanges than the Congressional Budget Office has forecast — which in turn would raise ObamaCare’s costs far beyond official projections.
The National Federation of Independent Business says that Obamacare’s taxes on small businesses would stifle employment, providing a strong incentive for businesses not to expand beyond 10 or 25 workers.
This page provides links to letters written to Health and Human Services Secretary Kathleen Sebelius from 12 of the 19 states that have opted out of Obamacare’s federal high-risk pools.