Commentary: Country Cannot Afford Obamacare

(Editor’s note: This commentary is an edited version of an Op-Ed by Mackinac Center President Joseph G. Lehman that appeared in The Detroit News on March 29, 2012.)

This week, the Patient Protection and Affordable Care Act is celebrating its recent two-year anniversary in front of the Supreme Court. The controversial law finds itself in front of the highest court in the land after 26 states — 10 of which are represented in this statement — joined together to challenge its constitutionality.

After ferocious public debate and two years of implementation, the legislation still faces an uncertain fate — and the Obama administration still finds itself working to convince a majority of Americans that its signature health care reform isn't a bad thing.

Current Gallup polling shows about 75 percent of Americans believe the law is unconstitutional.

According to the White House, individual liberty matters less than the law's big benefits, which are supposedly just around the bend. The view from the states, however, is decidedly less optimistic. The problems with the Affordable Care Act are so severe that we feel called upon to join together on behalf of our sister think tanks to enumerate the specific harmful effects of the law.

The act imposes new burdens on states in three dangerous and damaging ways.

First, it costs our businesses with new taxes. Second, it costs our residents with higher premiums. Third, it costs our states, threatening to reduce access to care for Medicaid recipients on the losing end of strained budgets.

Tallying these cumulative economic burdens explains and justifies today's stubborn public opposition. Rather than controlling costs, the law controls lives — even to the point of worsening them.

Consider the costs to businesses, which are already holding down employment in anticipation of new legislation. The Joint Committee on Taxation finds that the law will be responsible for a total of $400 billion in new taxes and fees in the next seven years. Even the Obama administration's own Department of Health & Human Services (via the Centers for Medicare and Medicaid Services) admits the law will push health care expenditures higher. Though the Obama administration continues to deny it, the calculus is simple: more health care spending equals more expenses on already-strapped businesses.

What about the impact on our fellow citizens? The law has raised, not lowered, premiums. Consulting firm Aon Hewitt estimates that premiums in the individual market are some 5 percent higher this year because of the health care law. More is to come. In Wisconsin, a study by Gorman Actuarial and MIT's Jonathan Gruber — an adviser to the president on the Affordable Care Act — sees an average premium increase of 30 percent. This will raise premiums for the 59 percent of individuals who aren't eligible for a tax credit by about a third. In Ohio, the accounting firm Milliman estimates that premiums in the individual market will increase by as much as 85 percent above current market rates.

Finally, the law wreaks havoc on our state budgets. In the first 10 years, it will increase Medicaid costs in the state of Nevada by $5.4 billion, according to the Nevada Policy Research Institute. A study by the Texas Public Policy Foundation finds that Medicaid spending in Texas will increase by an astounding $31.2 billion over the same span as people who currently qualify for Medicaid but opt out of the program are forced to enroll.

While the U.S. Supreme Court will also focus on the key issue of whether the act's individual mandate is constitutional, the law's devastating economic consequences cannot be ignored. Its intended reforms raise taxes, increase premiums, and balloon budgets while businesses, individuals, and states struggle to gain the upper hand on their finances.

Whether the Supreme Court finds it constitutional or not, this is one law America can't afford.

Co-sponsors:

• Matthew J. Brouillette, Commonwealth Foundation
• Brett Healy, The John K. MacIver Institute for Public Policy
• Dr. Robert McClure, James Madison Institute
• Tarren Bragdon, Foundation for Government Accountability
• Forest Thigpen, Mississippi Center for Public Policy
• Brooke Rollins, Texas Public Policy Foundation
• Dann Mead Smith, Washington Policy Center
• Jonathan Bechtle, Freedom Foundation
• Jon Caldara, Independence Institute
• Andy Matthews, Nevada Policy Research Institute
• Gary Palmer, Alabama Policy Institute

#####

Joseph G. Lehman is president of the Mackinac Center for Public Policy, a research and educational institute headquartered in Midland, Mich. Permission to reprint in whole or in part is hereby granted, provided that the author and the Center are properly cited.