Obamacare Economics

A quick review of the new taxes associated with the  ACA (Now SCOTUS Care) is revealing.  No matter that John Benedict Roberts has now saved Obamacare twice, the law is bad economics as Larry Kudlow points out in a recent editorial.  There is now an extra 0.9 percent Medicare tax on salaries and on self-employment income.  There is a 3.8 percent tax increase on capital gains and dividends.  There is now a cap on healthcare flexible spending accounts and a higher threshold for itemized medical-expense deductions.  And now there is a stiff penalty on employer reimbursements for employer reimbursements use for individual employee health-policy premiums.
The penalties for a business owner for moving from 49 employees to 50 are onerous.  Similarly keeping an employee at 29 hours a week is avoids costs associated with going to 30 hours a week.  The higher percentage of people reported by the Bureau of  Labor Statistics doing part time work is no surprise during this so called recovery.  There is no disputing the low labor-force participation rate, but why should anyone be surprised.  " Obamacare is a tax on full-time work. After-tax, people working part time yield more disposable income than working full time."

Another issue under reported is the fall off in healthy millennial signups.  The risk pool appears to be shrinking which will force insurance companies to raise rates yet again.  According to the consulting firm Avalere many exchanges are raising rates from 20 to 36 percent for 2016.  This is in addition to the higher deductibles hitting the consumer pocket book.  

As a practicing Orthopedic Surgeon and knowing something about health care finance, things are upside down.  More people are coming to caregivers with Medicaid cards but in our state of Illinois payments are delayed and are less than half of the average commercial carrier.  Not surprisingly fewer and fewer Dr's are not taking medicaid.  It won't be long before that is not an option and states will demand all doctors see medicaid.  I predict it will be tied to state license renewal.  

 

The law remains unpopular. " In the latest NBC/Wall Street Journal poll, 65 percent of Americans think Obamacare needs either modifications or a major overhaul, just 8 percent say it is working well, and 25 percent say it should be eliminated."

 http://www.newsmax.com/Finance/LarryKudlow/Obamacare-Economics-Supreme-Court-Taxpayer-bailout/2015/06/26/id/652475/#ixzz3eUcyOiiA