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Obama’s Health Care Reform Prescribes Painful Costs and Cuts
09.15.09

by Penny Wise 

President Obama likes talking about sharing—sharing the wealth, sharing responsibility, or perhaps more precisely, sharing the pain. His health care reform plan is full of sharing, and if you read between the lines and look below the surface, you can see he is looking to share a lot of pain.
 
In his September 9 speech on health care reform before a joint session of Congress, President Obama said “individuals will be required to carry basic health insurance” and “businesses will be required to either offer their workers health care, or chip in to help cover the cost of their workers” because “improving our health care system only works if everybody does their part.”
 
The president went on to say that “because Medicare is such a big part of the health care system, making the program more efficient can help usher in changes in the way we deliver health care that can reduce costs for everybody.”
 
Translation of Obama-speak: Individuals and businesses can expect to pay more and seniors can expect to receive less under the president’s health care plan.
 
In New Hampshire, the Census Bureau estimates that an average of 140,000 individuals—slightly more than 10% of the population—are without health insurance. Democrats in Congress are proposing up to $3,800 a year in fines on individuals and families without health insurance. That could add up to a minimum of $105 million a year in fines on New Hampshire residents.
 
Also, Democrats in Congress are proposing a surtax on wealthy Americans to pay for the president’s health care plan, which would increase the top personal income tax rate to 46% from the current 35%, ignoring advice from economist Christina Romer, one of President Obama’s top economic advisors, who wrote before she joined the Obama administration that increasing taxes on top income earners is “highly contractionary.”
 
In New Hampshire in 2006, the top 5% of income earners paid 54% of all federal income taxes paid in the state. Based on the 2006 estimates, increasing their tax rate from 35% to 46% would cost the top income earners in the state an additional $865 million a year in federal income taxes, making them pay 60% of all federal income taxes in the state.
 
When it comes to businesses, Democrats in Congress want to impose a payroll tax of up to 8% on firms that do not provide health insurance coverage to employees. That could cost $35 million a year for the estimated 10,000 businesses in New Hampshire—most of them very small businesses—that do not provide employees with health insurance.
 
So far, President Obama and the Democrats in Congress are talking about New Hampshire residents and businesses potentially chipping in an additional $1 billion a year in taxes to pay for their health care reform plans.
 
What about seniors in New Hampshire? Their share would be slightly over $1 billion a year as well. New Hampshire’s estimated 153,880 seniors on Medicare would be responsible for $1.04 billion a year in cuts in Medicare to pay for the $231 billion a year the president is seeking in Medicare savings.
 
The cost of the Obama administration’s health care reform plan to New Hampshire residents, businesses, and seniors could be a whopping $2 billion or more a year in the form of penalties, higher taxes and decreased services. This is what President Obama means by everybody doing his or her part.
 
Add in the costs of the proposed health care reform plan in the other 49 states and there is a good reason the President and the White House “have offered few details on how they intend to pay for the plan.” They know that if they reveal the true costs of their proposals and people understand how painful this kind of sharing will be, the plan will be dead on arrival, which it should be.

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