EC: What the Senate Bill Would Do To America

Heritage Foundation

Another day, another no-show for the Obamacare reconciliation bill. House Democrats were quick to shift blame to the Congressional Budget Office (CBO) with Rep. Robert Andrews telling The Hill that the delay "has been much more technical than substantive. ... It's not like what tax has to go or what spending has to go." Which is an interesting claim, since Politico reported that AFL-CIO President Richard Trumka was summoned to the White House yesterday afternoon "to discuss a higher-than-expected excise tax on some health care plans." In fact, Politico added: "A labor source said Trumka's meeting would focus on the entire bill, not just the excise tax question." Sounds like more than just technical details are still in flux.

But in reality, none of these discussions really matter. The reconciliation bill being drafted is nothing more than thin political cover for House Democrats who believe the Senate bill is terrible public policy but want to please their leadership and the President by voting for it anyway. As we detailed yesterday, there is no bill but the Senate bill. Once the House passes the Senate bill, the President will sign it. Game over. It has been almost three months since the Senate passed their bill in the dead of night on Christmas Eve. A review of just how terrible it really is, is in order:

New Middle-Class Taxes: Throughout his campaign, President Barack Obama promised he would not raise taxes on American households making less than $250,000. The Senate bill shatters that promise. For starters, just look at the reason Trumka went to the White House yesterday: the excise tax on high-cost health insurance plans. This tax would overwhelmingly hit middle-class taxpayers. Taxes on prescription drugs, wheel chairs and other medical devices would also be passed on to all consumers, hitting the lower- and middle- classes the hardest.

Increased Health Care Costs: The Senate bill manifestly does nothing to bend the health care cost curve downward. According to the latest CBO report, the Senate bill would actually increase health care spending by $210 billion over the next 10 years. This follows a previous report from the President's own Center for Medicare and Medicaid Services (CMS) showing the Senate bill would result in $234 billion in additional health care spending over 10 years.

Increased Health Insurance Premiums: The President initially promised that Americans would see a $2,500 annual reduction in their family health care costs. But under the Senate bill, premiums would go up for millions of Americans. In fact, according to the CBO, estimated premiums in the individual market would be 10“13 percent higher by 2016 than they would be under current law.

Increased Deficits: Despite claiming to be comprehensive health care reform, the Senate bill does not address the fact that Medicare's current price-fixing doctor reimbursement scheme is set to reduce doctor payments by 21% this year. That simply is not going to happen. Congress will pass that fix separately. If that cost were included, Obamacare is already $200 billion in the red. Now throw in the fact that the Senate bill is paid for with another $463 billion in Medicare cuts to health care providers. CMS says if these cuts occur, one-fifth of all health care providers will face bankruptcy. That simply is not going to happen. Just like the doctor reimbursement cuts have never happened, the Obamacare Medicare cuts will never happen. So in reality, Obamacare will add almost $700 billion to our national deficit in the next ten years alone.

Increases Unemployment and Puts Millions of Americans on Welfare: According to The Heritage Foundation's Center for Data Analysis (CDA), a dynamic analysis of the tax hikes and deficits created by the Senate bill shows that an average 690,000 jobs per year would be lost if it became law. In addition, over half of all Americans who would gain health insurance through the bill (18 million out of 33 million) would do so by being placed on Medicaid, which is a welfare program.

Higher taxes, higher health care costs, higher health insurance premiums, higher deficits, more unemployment and more Americans on welfare. That is America's future should the Senate Obamacare bill become law.