All the political smart money was on a 5-4 decision striking down the Individual Mandate, which will require everyone to buy health insurance or face a tax penalty. If that had happened, it would have most certainly killed the Affordable Care Act. So, like many liberals, I was searching for something inexpensive to destroy as I awaited news of the court’s decision.
But Chief Justice John Roberts surprised everyone when he voted with the four liberal justices to allow the provision — not under the Commerce Clause, but as a tax.
Upon hearing that, conservatives throughout the nation went bonkers. A handful even called for a straight-up armed revolt. But most just talked about how it marked a step toward socialism, how it was a slap in the face to the founding fathers or (my personal favorite) how it solidified the largest tax-hike on the middle class in the history of the universe.
I guess it’s a step up from death panels, but the rhetoric around Obamacare continues to be a frenzy of rants — all of which void of any substantive discussion about the facts.
Though it is no doubt a hefty tax increase, the Affordable Care Act would actually rank as the 10th largest revenue hike in America — not the biggest in the universe. In fact, both Ronald Reagan and George H. W. Bush signed legislation with higher tax rates.
And I’m struggling to see how Republicans came to think that Obamacare is hitting the middle-class hardest. The first year the penalty of the Individual Mandate will be in effect, people will be charged a whopping $94 for not having health insurance. It moves up to $750 by 2016. After that, the penalty is set at less than 1 percent of an individual’s income.
Other taxes in the ACA:
• An increase of 9 percentage points to the Medicare payroll tax for people earning more than $200,000 a year ($250,000 for married couples). Those same income groups will pay a 3.8 percent tax on investment income. There are a lot of alarmist e-mails about that tax applying to all home purchases, but it is just on the profit made from the sale. For example, a married couple would have to make more than $500,000 in profit on a home sale to even start getting taxed at 3.8 percent.
• Raising the floor on medical expense deductions on itemized income tax returns from 7.5 percent to 10 percent.
• A 40 percent excise tax for the so called Cadillac health plans (anything more than $10,200 for individuals or $27,500 for families, according to Politifact.com).
• A fee for health insurance companies amounting to $60 billion over 10 years.
• A fee for the pharmaceutical industry amounting to $27 billion over 10 years.
• A 10 percent tax on tanning bed services.
Aside from the tanning bed tax, most of the revenue increases are aimed at millionaires and massive, billion-dollar-a-year industries. And if you think someone making $200,000 a year is middle-class, you need to get out more.
Now, conservative columnist Daniel Gardner put the number of taxes in the Affordable Care Act at 21. The list above was all I could find, and it was verified through multiple sources. I will gladly add to or clarify it, if someone can give me a reliable source showing the ones I missed (Fox News is not a reliable source by the way).
And what is this massive tax increase paying for? Following this paragraph is a list of the major improvements. It isn’t meant to be an all-inclusive rundown of every provision in the 2,000-plus page law. But these are the main ones from what I have seen. The law does include many measures for health-care related things like improving transparency for nursing homes. But this is already the longest column I’ve ever written, so forgive me for not mentioning them all. I encourage everyone to research it on their own.
The Affordable Care Act:
• Sets up the 80 percent rule. It’s where health insurance companies are required to spend 80 percent of their funds strictly on their customers. If they don’t, those customers get a check in the mail making up for the error. This summer, insurance companies will send more than $1 billion in rebates to their customers.
• Establishes Health Exchanges, marketplaces where individuals and small businesses can shop around for health plans. By grouping people together in these programs, it helps spread the risk and provide coverage for those who wouldn’t get it on their own.
• Puts an end to insurance companies capping coverage, denying care for pre-existing conditions or dropping sick patients from their plan.
• Develops uniform coverage documents enabling customers to make accurate comparisons between providers.
• Allows people to stay on their parents’ health insurance plan up to age 26.
• Creates an appeals process where customers can challenge an insurance provider’s decision to deny a claim.
• Reduces the so called “Doughnut Hole” in Medicare Part D, a prescription plan for seniors. It’s not huge, but it means a few hundred extra dollars every year for senior citizens struggling to pay for their medicine.
• There’s also the expansion of Medicaid to several million people. Of course, the recent Supreme Court ruling allows for states to opt-out of that provision. I would bet Alabama — being one of the 26 states that challenged the ACA in court — will likely say no thanks. However, there are a lot of talking heads in DC who say governors are not going to say no to tens of billions of Medicaid dollars simply to spite Obama. I’m not that optimistic.
Now, I would love to see a lively debate on the merits of Obamacare and the taxes that pay for it. What I would love even more is to hear — in explicit detail — the “replace” segment of the GOP’s “REPEAL AND REPLACE” battle cry. They’re really hot on the repeal part, but you ought to hear them fumble when some loose-cannon reporter asks them an actual question about their policy ideas to fix health care.
If you hate Obamacare, fine. There are some valid points to be made against the legislation. But calling it a march toward communism and saying that Thomas Jefferson is crying tears of blood are not legitimate points.
But I will start crying tears of blood if you come in with that horse crap about America having the greatest healthcare system in the world. We spend 15 percent of our GDP — more than any other nation in the world — just so we can be ranked 37th in health care. Every year, 18,000 Americans die because of lack of health insurance. Obamacare may not be the right way to fix it, but by God there IS a problem.
Daniel Gaddy is a staff reporter for the Daily Mountain Eagle and a Walker County native. He can be reached at firstname.lastname@example.org.