Recently, the U.S. House of Representatives introduced its 1,018 page health care proposal that costs nearly $1 billion per page and still doesn’t solve the problem of providing coverage to all Americans.
In fact, according to the Congressional Budget Office, under the House bill the number of Americans without health insurance increases over the next three years.
The House proposal would extend insurance to 37 million (still leaving 17 million uninsured) Americans over the next decade, covering more by expanding Medicaid and providing subsidies to help the uninsured meet the new federal mandate to purchase insurance.
Who is going to pay for increased coverage? Small business for one. Senior citizens will be hit as well.
First, let’s talk about small business owners and how they will be affected.
To pay for new spending, the House legislation proposes a surtax on those individuals who make $280,000 or more (the tax would range from 1% to 5.4%). The tax continues to rise the more money you make. The proposal essentially doesn’t include any exemptions for S corporations or other small businesses, many who file as individuals for tax purposes. In fact, half of all small businesses with 20-249 employees are likely to have their income affected by the surtax. The new Blue Dog “deal” still imposes new taxes and mandates on small employers with 17 or more employees. Based on the U.S. Small Business Administration numbers, the small businesses that are affected by the “deal” employ 70 percent of all small business workers, or 42.3 million workers. Finally, this “deal” still imposes the full eight percent payroll tax on small businesses with only 32 employees. This is not a “deal”!
The bad news doesn’t stop there. If the surtax doesn’t generate enough revenue to cover the costs of the bill by 2013, the surtax automatically doubles. For business owners, that is like charging your customers double for a product because you can’t make meet your numbers for the year.
Surtaxes and mandates only hurt our small businesses that are struggling to keep their doors open and the lights on in this difficult economy. This is no time to tell small businesses they have a choice between paying a new tax or being mandated to buy expensive health plans for their employees, especially when our small businesses account for around two-thirds of new jobs created.
For senior citizens, the legislation calls for a manager and monitor for the vast American health care system that will include an Independent Medicare Advisory Council, or IMAC. Under this Council, the president would name five physician or health care savvy members to serve five year terms on its board, picking one of them as chairman. They would have to be confirmed by the Senate.
The members of this Council would have two responsibilities. First, it would recommend to the president the updated fees Medicare would pay doctors, hospitals, nursing homes, labs, etc. This is now done by Congress. In order to control costs, IMAC’s recommendations could not exceed the “aggregate level of net expenditures” under Medicare. Second, IMAC would annually recommend a set of broader reforms to improve the quality or reduce the cost of medical care.
According to the Dartmouth Atlas project, which is a 20-year analysis of regional differences of Medicare spending, Medicare spends nearly $1,000 more per person in Tulsa, Oklahoma than it does in Kansas City, Missouri each year, yet health outcomes aren’t necessarily better. They are worse! Oklahoma ranks 45th , lowest in the nation for its health outcomes, according to United Health Foundation’s America’s Health Ranking report. And by the way, Kansas City is twice the size of Tulsa. Another ominous difference between Tulsa and Kansas City is the fact that in Oklahoma Medicare spends $2,776 per patient, compared with just $708 per patient in Missouri.
Medicare covers one-fifth of the population and has future unfunded obligations of $36 trillion dollars.
Congress needs to take its time to get it right. The health care system represents almost 20% of our economy. We certainly need to make some changes and the free market is the only way to go.
Terry Neese
Distinguished Fellow
National Center for Policy Analysis
Comments
I am a small business owner facing our renewal of group health benefits. The increases are quite shocking. These are numbers I do not want to offer to my employees, but have no choice. With the economy our business is very competitive and work is slow so increasing the company contribution toward health care benefits is not an option. We are being backed in a corner and may have to lay some employees off. In regard to the government offering a plan, I do not know about you but I would prefer that the government not dictate my health care. The government dictates enough to the small business owner.
Got something to say?
Examiner.com is looking for writers, photographers, and videographers to join the fastest growing group of local insiders. If you are interested in growing your online rep apply to be an Examiner today!