At the end of this year, the coverage provisions of the Affordable Care Act will take effect. Regardless of what a person thinks about the massive changes the law will make to America’s health care system, it’s important to understand the economic impact of the health care law’s regulatory burden and 23 tax increases.
The reality is that the Affordable Care Act creates multiple levels of new government regulation and the cost of the law is covered with taxes and penalties on businesses and consumers who already pay for their insurance. Health insurance premiums are expected to jump significantly as insurers shift costs to comply with mandated health care benefits.
The law also continues to cause great uncertainty among employers. The employer mandate requires companies with at least 50 workers to provide health insurance to those who work at least 30 hours. In anticipation, some employers have cut back hours or added part-time staff instead of full-time positions. The Bureau of Labor Statistics’ recent employment report shows that of the 162,000 jobs added in July, a disproportionate share is skewed towards lower-wage, part-time work. The ranks of part-timers being hired are swelling due to the uncertainty created by the employer insurance mandate. The White House in July unilaterally decided to postpone the employer mandate, but the one-year delay does not remove the future burden on employers. The delay also opens up insurance subsidies to fraud, as the IRS likely will not be able to certify if those who apply legally qualify.
The tax increases prescribed in the Affordable Care Act to raise $1 trillion over a decade include:
n A 2.3 percent excise tax on the sale of medical devices effective Jan. 1, 2013, increasing the cost of hip and knee replacements and other medical innovations that our aging society has come to depend on to extend quality of life;