From Investors Business Daily 11/10/2011
Health Reform: To the long and growing list of failed ObamaCare promises, you can now add this one: The tax credit that was supposed to cut insurance costs for millions of small businesses has proved to be a complete bust.
Shortly after President Obama signed his signature health reform law, he boasted that it would help the economy, pointing specifically to the small-business tax credit. Under the law, businesses that employ fewer than 25 full-time workers can get a credit of up to 35% of the premiums, climbing to 50% in 2014.
“This health care tax credit is pro-jobs, it’s pro-business, and it starts this year,” Obama said. The administration has since repeated this refrain many times.
Deputy chief of staff Nancy-Ann DeParle claimed that the tax credit is “one of the largest tax cuts for health care in history.” Small Business Administration head Karen Mills said it “will provide about $40 billion in tax relief over the next 10 years,” adding that it is “one of the most significant aspects of health care reform for small businesses.”
And to make sure everyone knew about this great new benefit, the IRS sent postcards to roughly 4 million eligible businesses, did extensive press outreach, organized more than 1,000 events and created a new Web page.
Yet despite it all, a mere 228,000 small businesses — just 5% of those eligible — have signed up for the credit, according to a Treasury Department Inspector General report released this week.
Why were the administration’s forecasts so wildly off the mark?
According to the IG report, one big reason is that the rules were way too complicated for most small businesses, noting that many complained the credit “is not worth the time and effort to claim it.” Among other things, applicants have to wade through seven worksheets.
This is, by the way, precisely what the National Federation of Independent Business — a stalwart ObamaCare critic — said would happen. “Far fewer than 4 million are eligible for the credit as a practical matter and still fewer will be able to avail themselves of the full credit,” it said. “Others who are eligible will find the credit so small and complex that it is not worth the cost of calculation.”
If this were the only way ObamaCare failed to lived up to its promises, it would be bad enough. But this is just the latest in a string of troubling flops. Among them:
• The $2,500 cut in insurance costs Obama promised his reforms would produce has instead turned into a premium hike of $2,400 since he took office.
• ObamaCare was supposed to provide affordable access to hundreds of thousands denied coverage because of pre-existing conditions. But instead, the “high risk” pools have attracted a meager 30,000.
• The initial insurance market reforms, which raised annual payment caps, unexpectedly threatened to push more than 3.4 million into the ranks of the uninsured, forcing the administration to quickly issue more than 1,500 waivers.
• Obama was also forced to abandon the long-term care insurance part of the reform after realizing it was hopelessly flawed.
• And the advertised price tag has already been busted, with the Congressional Budget Office upping the cost by more than 10% to cover unanticipated administrative costs.
Remember: These are all the quick and easy reforms contained in ObamaCare. Given that none of them has worked as promised, imagine the nightmares ahead when ObamaCare’s massive changes kick in after 2013.
We can only hope that a Republican president kills the entire misbegotten law before then, so we’ll never have to find out.