OPINION:
Buying something without knowing the price is foolish. President Obama sold Obamacare to America by hiding the price tag, and five years later it’s clear that there’s still no such thing as a free lunch, or free health-care insurance, either. Foolish people who thought the cost of compulsory health care didn’t matter because someone else would pay for it are learning that when big government gets bigger, everyone pays.
The latest cost of the president’s salute to socialism is the lost labor supply. The Congressional Budget Office issued a 22-page report earlier this month with the bad news: “The labor force is projected to be about 2 million full-time-equivalent workers smaller in 2025 under the [Affordable Care Act] than it would have been otherwise.” Across the labor market, workers are expected to respond to the effects of the health care law by working fewer hours.
For some, the law will raise the effective tax rate on earnings, encouraging them to work less. High-income employees will be punished by an increase in their payroll tax, which funds Medicare’s Hospital Insurance programs. Others will choose to curtail their labor and subsequent income to remain eligible for premium subsidies. All told, Obamacare is forecast to cause about 1 percent of the labor supply to vanish.
American workers get up early every day eager to provide for their loved ones, and Big Brother is not one of the beloved. If the government penalizes workers for working more hours, the workers, who are not the credulous drones President Obama’s schemers think they are, will inevitably avoid the penalty. That means being smart and working less, thanks to the disincentives of Obamacare. This is not the attitude that built America, but it is human nature. Benjamin Franklin put ancient wisdom plain in “Poor Richard’s Almanac”: “God helps those who help themselves.”
Even if paychecks shrink, insurance premiums will not. The cost of medium-priced “silver” insurance plans is expected to rise an average of 7.5 percent in 2016, much steeper than the rate of inflation, which so far in 2015 is only 0.2 percent. With monthly premiums exceeding $1,000 and annual deductibles exceeding $13,000 for those ineligible for government subsidies, many families won’t be able to afford to see their doctor except for annual checkups, which are “free.”
Millions of Americans choose to pay the Obamacare penalty instead. In the new year, that penalty will rise to $695 per adult, or 2.5 percent of taxable income. The Senate Budget Committee projects the cost of Obamacare through 2023 will come to $2.6 trillion. The president’s free lunch is expensive.
The insurers say their share of the receipts is not enough. Stephen Hemsley, the CEO of UnitedHealth Group, one of the nation’s largest insurers, says his company is on track to lose $500 million in 2016 by providing Obamacare plans, and may leave the market in 2017. “We can’t subsidize a marketplace that doesn’t appear at the moment to be sustaining itself,” he says.
The U.S. Senate followed the lead of the House earlier this month, voting to repeal Obamacare. This repeal won’t survive Mr. Obama’s veto. Americans need relief from the president’s experiment with the health of the people who elected him, and House Speaker Paul Ryan promises to present another alternative in January. We hope he won’t forget to include the price tag.
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