You Must Have Health Care Or Be Fined - Unless You're A Member Of Congress

Earlier this week the President of the United States did something that I’m having difficulty understanding and even more difficulty accepting.  He granted subsidies to members of Congress and their staff to offset the cost of health insurance mandated by Obamacare.  That’s right – he is going to reimburse Congressional staff for the increased cost of their healthcare insurance.  But he’s not going to reimburse you for your increased costs.  In fact – if you can’t afford to purchase the same mandated health care insurance he’s going to fine…  er, uh… tax you for it. 

So here is my question….   

If the increased costs of Obamacare must be reimbursed to the people who created it - why is it not going to be reimbursed to the average American?!

James Hoffa, son of Jimmy Hoffa and current head of the AFL/CIO (Teamsters) Union, recently joined with Joseph Hansen, the International President of the UFCW, and D. Taylor, the President of UNITE-HERE, to write a scathing letter to Harry Reid and Nancy Pelosi denouncing Obama’s Affordable Care Act because it will “destroy the foundation of the 40 hour work week that is the backbone of the American middle class.”

Text from the letter includes the following:

Like millions of other Americans, our members are front-line workers in the American economy. We have been strong supporters of the notion that all Americans should have access to quality, affordable health care. We have also been strong supporters of you. In campaign after campaign we have put boots on the ground, gone door-to-door to get out the vote, run phone banks and raised money to secure this vision.

Now this vision has come back to haunt us.

As you both know first-hand, our persuasive arguments have been disregarded and met with a stone wall by the White House and the pertinent agencies. This is especially stinging because other stakeholders have repeatedly received successful interpretations for their respective grievances. Most disconcerting of course is last week’s huge accommodation for the employer community—extending the statutorily mandated “December 31, 2013” deadline for the employer mandate and penalties.

Time is running out: Congress wrote this law; we voted for you. We have a problem; you need to fix it.

I remember other times the Teamsters weren’t happy with something.  Usually someone got thumped.  I wonder if Reid and Pelosi remember….?

So here’s my next question….

If Congress has to be subsidized for health care and unions across the country are saying it’s going to destroy the 40 hour work week, and unions and corporations are being granted waivers from Obamacare requirements, why do so many people still think it’s such a wonderful thing?

Let’s look a moment at some of the taxes that will hit the average middle class family because of Obamacare:

2013

Medical Device Tax – the 2.9% tax on manufacturers’ gross sales (even if the company does not make a profit in a given year) will cause job loss in the medical device industry and make medical devices, from pacemakers to hip replacements, more expensive.

Higher Medical Bills Tax – Families could get a tax deduction for any medical bills that were over 7.5% of their adjusted gross income (AGI).  Obamacare will now put a threshold on that deduction of 10% of AGI.  Therefore, Obamacare not only makes it more difficult to claim this deduction, it widens the net of taxable income.

Flexible Spending Account Tax - The 30 to 35 million Americans who use a pre-tax Flexible Spending Account (FSA) at work to pay for their family’s basic medical needs face a new Obamacare cap of $2,500. This will squeeze $13 billion of tax money from Americans over the next ten years. (Before Obamacare, the accounts were unlimited under federal law, though employers were allowed to set a cap.)

There is one group of FSA owners for whom this new cap will be particularly cruel and onerous: parents of special needs children. Nationwide there are several million families with special needs children and many of them use FSAs to pay for special needs education. Tuition rates at one leading school that teaches special needs children in Washington, D.C. (National Child Research Center) can easily exceed $14,000 per year. Under tax rules, FSA dollars can be used to pay for this type of special needs education. This Obamacare tax provision will limit the options available to these families.

2014

Individual Mandate Non-compliance Tax - Starting in 2014, anyone not buying “qualifying” health insurance – as defined by President Obama’s Department of Health and Human Services -- must pay an income surtax to the IRS.

The tax will not be a simple tax that stays at the same level year after year.  It will increase exponentially with each passing year.  (See table below)

Americans liable for the surtax will pay according to the following schedule:

                    1 Adult                             2 Adults                   3+ Adults

2014          1%AGI/$95                  1%AGI/$190              1%AGI/$285

2015          2%AGI/$325                2%AGI/$650              2%AGI/$975

2016          2.5%AGI/$695             2.5%AGI/$1390         2.5%AGI/$2085

Tax On Healthcare Insurers - Annual tax on the industry imposed relative to health insurance premiums collected that year.  The tax phases in gradually until 2018.  Fully imposed on firms with $50 million in profits.  This tax will cause private health care premiums to increase. 

Employer Mandate Tax - this tax was set to go into effect next year but the President delayed its implementation - which leads me to another question.

What authority does the President have to delay implementation of a law, or portion thereof, that is current and has already been implemented?  

2018 - Tax on Union Member and Early Retiree Health Insurance Plans:  Obamacare imposes a new 40 percent excise tax on high cost or “Cadillac” health insurance plans, effective in 2018. This tax increase will most directly affect union families and early retirees, who are likely to be covered by such plans. This Obamacare tax will be levied on insurance policies whose premiums exceed $10,200 for an individual and $27,500 for a family.

Still think Obamacare is a good thing?  The long term goal of Obamacare is ultimately to put private insurance companies out of business and get everyone into government-run health care plans, eventually making the United States a single payer system.  Many Americans, blinded by loyalty to President Obama, still believe his lies that the Affordable Care Act “won’t add one dime to the deficit.”  It turns out President Obama was right when he said this.  Figures from the Government Accountability Office suggest that the Patient Protection and Affordable Care Act will in fact add 62 trillion dimes over the next 75 years.  That’s 6.2 trillion dollars.

Yup – Obamacare is a good thing.  Even the people who put it together don’t want to pay their share of it.  To those of you who still believe it’s great I say – “keep on believing.”  One day you’ll figure it out.  But by then it will be too late.