Health Care Bill: Bad Policy in a Bad Economy

R. Bruce Josten

When President Obama signed the $940 billion, 2,400 page health care bill into law six months ago, the business community warned that the bill was fundamentally flawed. We said that this legislation would fail to fix what’s broken in our health care system, and that it would threaten to break what works. Unfortunately, our worst fears are already starting to come true.

Just a few weeks ago, the U.S. Centers for Medicare and Medicaid Services released a report indicating that health care spending will increase by an average annual rate of 6.3%, up from the 6.1% growth rate projected before the health care bill was passed. While the change is modest, it clearly disproves the claims that this legislation would reduce spending. With the United States already knee deep in red ink, we can’t afford to add to our debt.

Looking for more evidence that Congress passed a bad bill? Then consider the premium increases that health insurance companies are asking for, due, in large part, to new benefits required by the law. But instead of working with these companies to find ways to minimize the cost passed along to families, HHS Secretary Kathleen Sebelius fired a warning shot over the bow of the insurance industry. She suggested that insurers who increase rates in excess of what the administration deems acceptable could be excluded from the health insurance exchange–and as many as 30 million customers. This could be seen by some as an attempt to move toward government-run health care.

Even small businesses have suffered. One of the provisions included to offset the cost of the bill imposed a burdensome new 1099 tax form filing mandate on small businesses. In 2012, when new reporting requirements come into effect, businesses will have to keep track of all purchases not made with a credit card that exceed $600 per vendor in a calendar year. This includes goods as well as services and also applies to purchases from a corporation. If, for example, your business buys $600 in office supplies from a single retailer, you will be required to file a 1099 form. Multiply this by the number of vendors that you do business with and you have a big headache. As a result, these job creators will be forced to spend more time and resources on accounting and tax compliance and less time on growing their businesses and hiring new workers.

And the list goes on …

Requiring small businesses to provide insurance that they cannot afford–or else pay steep fines–will eliminate jobs.

Requiring states–which are already running huge deficits–to add millions of new enrollees to Medicaid will lead to tax increases and program cuts.

Raising taxes by $569 billion as the nation grapples with nearly 17% unemployment and struggles to emerge from a deep recession is an affront to economic common sense.

So what happens next? While some have discussed repeal, the U.S. Chamber believes the most effective approach is to work through all available and appropriate avenues–regulatory, legislative, legal, and political–to fix the bill’s flaws and minimize its harmful impacts.

We will strongly encourage citizens to hold their elected officials accountable when they vote this November. There is every indication that the public is ready to do so–a USA Today/Gallup poll conducted at the end of August found that 56% of Americans opposed the health care overhaul, while only 39% supported it.

We will also continue to promote real health care reform that curbs costs, reins in frivolous lawsuits, expands consumer choice, and removes the heavy hand of government from decisions that should be made by doctors and patients.

Like it or not, the health care debate is not over.

Bruce Josten is the executive vice president for Government Affairs at the U.S. Chamber of Commerce

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