Guest Editorial
BY SALLY C. PIPES | MARCH 16, 2011
New pushback against ObamaCare
U.S. District Judge Vinson recently ruled the president's landmark healthcare law unconstitutional, granting the attorney generals of 26 states and the National Federation of Independent Business a victory in their fight against the measure. His decision comes on the heels of a vote by the House of Representatives to repeal the health reform package.
The judiciary and the legislature are clearly in step with the American people. A Rasmussen survey found that 58 percent of likely voters supported the repeal of Obamacare. And a Wall Street Journal poll reported that 84 percent of voters said Obamacare affected their vote.
In recent weeks, even some Democrats who originally supported the law have called for scrapping key portions of it.
Take the so-called 1099 provision, which will require businesses to submit a tax form to the IRS for each vendor with whom they do more than $600 in annual business starting in 2012. Following the midterm elections, President Obama signaled a willingness to repeal the rule, calling the hidden tax "burdensome for small businesses." He went on to say that "it requires too much paperwork, too much filing. It's probably counterproductive."
What's taken so long? The rule would saddle some 40 million businesses with huge new compliance costs. Instead of devoting resources to job creation and business development, entrepreneurs would be forced to waste time and money filing new paperwork.
Unfortunately, Republicans and Democrats have been unable to agree on legislation that would repeal the 1099 rule. Rep. Dan Lungren (R-Calif.) has introduced a bill to scrap the provision. If his measure fails, Rep. Jo Ann Emerson (R-Mo.) has stated that she'll use the appropriations process to kill the 1099 rule. And Sen. Mike Johanns (R-Neb.) has attached a repeal amendment to a bill that would reauthorize funding for the Federal Aviation Administration. Regardless of the approach, small businesses nationwide are surely hoping that the burdensome regulation will die.
The Obama Administration is also regularly choosing to exempt many firms from some of the healthcare bill's new rules, rather than admit that the bill will negatively impact workers or cause them to lose coverage. For instance, McDonald's received a waiver after announcing that its low-cost, bare-bones "mini-med" health plans would run afoul of the medical-loss rules, which require insurers to spend at least 80-85 percent of premium dollars on claims.
In the few months since the legislation passed, the feds have handed out more than 700 other exemptions to employers, insurers, and labor unions that together cover more than two million people.
The Obama Administration is also coming to grips with the looming failure of one of the most highly touted aspects of the law – a program to provide health insurance to those denied coverage because of preexisting conditions.
The Department of Health and Human Services estimated in July that it would now be insuring 375,000 people who had been previously shut out of the insurance market. But the Administration recently admitted that only about 8,000 people with preexisting conditions had actually signed up.
That's about 2 percent of the projected enrollment.
The next component of the bill to fail may be the most important one – the deeply detested individual mandate, which requires the uninsured to either get health coverage or pay a fine.
Judge Vinson has already ruled the mandate unconstitutional, as has U.S. District Judge Henry Hudson in a separate case led by Virginia.
In both Arizona and Oklahoma, voters have approved state constitutional amendments aimed at outlawing the mandated purchase of health insurance. Nearly three-quarters of voters in Missouri signed off on a similar ballot initiative earlier this year.
The Congressional Budget Office (CBO) predicted the failure of the mandate well before the reform law passed. A July report from the nonpartisan agency predicted that by 2016, four million people would defy the mandate and pay the fine for remaining uninsured. All told, according to CBO, about 21 million people will be uninsured in 2016 – most of whom will be exempt from the fines altogether.
So despite committing more than a trillion taxpayer dollars over the next decade to health reform, Obamacare will leave 23 million people uninsured by 2019, drive the cost of care up for virtually all Americans, and put the federal government in charge of ever more of our healthcare decisions.
As the Obama Administration grapples with implementing its signature piece of legislation, the case for repealing it is becoming self-evident. Public support for the law continues to erode. Lawmakers should follow the House's lead and repeal this monstrosity.
Sally C. Pipes is President, CEO and Taube Fellow in Health Care Studies at the Pacific Research Institute. Her latest book, The Truth About Obamacare, was published in 2010.
