Opinion: Obamacare Is Already Falling Apart

Sally C. Pipes
Special to AOL News

Last week, the House of Representatives voted by a wide margin — 245 to 189 — to repeal the president’s landmark health reform package. It’s unclear whether Senate Majority Leader Harry Reid, D-Nev., will bring the measure up in the upper body.

But even he doesn’t, the law is already showing signs of serious trouble.

In recent weeks, some Democrats who supported the law have called for scrapping portions of it.

Take the so-called 1099 provision, which will require businesses to submit a tax form to the IRS for each vendor with whom they do more than $600 in annual business starting in 2012. Following the midterm elections, President Obama signaled a willingness to repeal the rule, calling the hidden tax “burdensome for small businesses.” He went on to say that “it requires too much paperwork, too much filing. It’s probably counterproductive.”

Sen. Max Baucus, D-Mont., one of the principal authors of the health care law, and former House Speaker Nancy Pelosi, D-Calif., have also expressed support for repealing the provision.

What’s taken them so long? The rule would saddle some 40 million businesses with huge new compliance costs. Instead of devoting resources to job creation and business development, entrepreneurs would be forced to waste time and money filing new paperwork.

The Obama administration is also regularly choosing to exempt many firms from some of the health care bill’s new rules, rather than admit that the bill will negatively impact workers or cause them to lose coverage. For instance, McDonald’s received a waiver after announcing that its low-cost, bare-bones “mini-med” health plans would run afoul of the medical-loss rules, which require insurers to spend at least 80-85 percent of premium dollars on claims.

In just eight months since the legislation passed, the feds have handed out more than 200 other exemptions to employers, insurers, and labor unions that together cover more than 1.5 million people.

The Obama administration is also coming to grips with the looming failure of one of the most highly touted aspects of the law — a program to provide health insurance to those denied coverage because of preexisting conditions.

The Department of Health and Human Services estimated in July that it would now be insuring 375,000 people who had been previously shut out of the insurance market. But the administration recently admitted that only about 8,000 people with preexisting conditions had actually signed up.

That’s about 2 percent of the projected enrollment.

The next component of the bill to fail may be the most important one — the deeply detested individual mandate, which requires the uninsured to either get health coverage or pay a fine.

In both Arizona and Oklahoma, voters have approved state constitutional amendments aimed at outlawing the mandated purchase of health insurance.

Nearly three-quarters of voters in Missouri signed off on a similar ballot initiative earlier this year. Twenty-six state attorneys general and the National Federation of Independent Business are currently pursuing a lawsuit challenging the constitutionality of the mandate. Virginia’s attorney general has mounted a separate lawsuit, as has a group of citizens in Ohio.

The Congressional Budget Office (CBO) predicted the failure of the individual mandate well before the reform law passed. A July report from the nonpartisan agency predicted that by 2016, four million people would defy the mandate and pay the fine for remaining uninsured. All told, according to CBO, about 21 million people will be uninsured in 2016 — most of whom will be exempt from the fines altogether.

So despite committing more than a trillion taxpayer dollars over the next decade to health reform, Obamacare will leave tens of millions uninsured, drive the cost of care up for virtually all Americans, and put the federal government in charge of ever more of our health care decisions.

As the Obama administration grapples with implementing its signature piece of legislation, the case for repealing it is becoming self-evident. Public support for the law continues to erode. Lawmakers should follow the House’s lead and repeal this monstrosity.

Sally C. Pipes is president, CEO and Taube fellow in health care studies at the Pacific Research Institute. Her latest book, “The Truth About Obamacare,” was published in 2010.

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