The House of Representatives rolled out their Prescription to reform America’s Health Care system.

The Price Tag? $1.5 Trillion over 10 Years.  Yes, that’s Trillion with a “T”. Of course, Governmental predictions on how much new programs will cost in the future are notorious for producing low-ball estimates.  The actual cost could be off by multiple Billions, or possibly Trillions given the Government’s track record.

The plan would mandate that everybody in the Country carry Health Insurance.  That’s right.  If you can’t currently afford to buy Health Insurance the Government will make you buy it anyway.  If you don’t buy it, you will be subject to hefty penalties.  This amount to a tax increase for every one that currently does not pay for Health Insurance.

 

If you are employed by someone else, the company you work for will be forced to offer health benefits.  The fine for not offering coverage would be a fine equal to 8% of the employee’s wages.  Read that carefully.  8% of the Employee’s wages.  If the employer does not offer coverage, the employee must purchase it or face a 2.5% tax. (Capped at the average cost for a policy.)  While Small Businesses are exempt under the current proposal, their employees aren’t.

 

For why that has huge implications, try this example.  You have a business that employs 100 workers, and pays $50,000 per employee.  That’s a total cost of $5,000,000.  Let’s say the company has a profit of $500,000.  (Fairly profitable, given the size.)  Adding a fine equal to 8% of the employee’s wages increases the cost of dong business by $400,000.  This is the equivalent of an 80% tax hike on this company.  And this is on top of any other taxes the company has to pay. If it already has an effective tax rate over 20%, it is now operating at a loss.

 

And it might not matter if the business already offers Health Coverage.   You remember that word being used by Obama during the Presidential Campaign? Adequate?   The business could still face penalties if it offered coverage if the coverage isn’t deemed “adequate” by the Government.   Have any bet as to how many Employer Plans will meet the Government’s requirements?

 

All this is on top of a surtax on higher wage earners.

 

Another source of concern, the plan includes a Government option.  Why is this a concern?  The Federal Government can place mandates on Privately Offered plans, driving up their costs.  At the same time, the Government will be subsidizing the price of the Coverage it offers with tax-payer money.  This will lower the cost of the Government option in relation to the Insurance Offered by Private Businesses.   A Public Option, subsidized with tax money, will drive Private Insurance Companies out of business.

 

The plan also calls for the expansion of Medicaid to those making 4 times the Poverty level.   That’s $43,000 for individuals, $88,000 for a family of four.   If the plan cause individuals making $40,000 and families making $80,000 to need help making ends meet, then there is something seriously wrong with the plan.

 The plan would also extend the Medicare Prescription drug plan.

With all that, how can the Democrats say they will pay for part of the cost for the new Health Care plan with cost reductions in Medicare and Medicaid? They are going to increase costs for both plans by extending coverage.

 

At a time when the Country is already running a $1 Trillion Deficit, adding this kind of bloated Government program is like prescribing bleeding to a patient suffering from anemia.

 

(Source, Associated Press)