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March 2013 Policy Study, Number 13-3


Just Say NO – and Keep Saying NO – to Federal Health Care Exchanges and Medicaid Expansion


Problems with Obamacare



A recent report by the Heartland Institute analyzed and documented several significant problems with Obamacare:[11]


1. It is a complete government takeover of health care. There are at least 159 new government agencies created with a corresponding regulatory burden. Senator Chuck Grassley was recently photographed with a seven-foot-tall stack of new regulations, with still more to be issued.


2. It will result in “soaring” insurance and health care costs. Guaranteed issue policies will be a key driver of this cost, along with higher mandated baseline coverage and “free” services.


3. It will result in government rationing of services and lower quality of care. Tight supply and high demand will cause rationing, for both the elderly and the young, especially with fewer new/continuing doctors and consolidated facilities. As more providers have higher numbers of patients to see and are paid less, care provided will go down. The approved (comparative effectiveness) treatment standards will add to this.


4. It imposes significant new and higher taxes. Both the individual and employer mandates, coupled with a near universal subsidy of policies by the federal government, must be paid for in one way or another. As a result, economic growth, new jobs, and wage increases are already being hindered. A wide variety of businesses are reducing the number of full-time employees and working to ensure they do not have 50 or more full-time employees.


5. It contributes to runaway government spending. When consumers of a product have no personal accountability for use or impact on the cost, inflation and overuse result. Government spending will correspondingly increase. From the very beginning in 1965, Medicare costs have been at least 9-10 times higher than projected. Medicaid fraud is rampant and famously hard to control and detect.


6. It will result in higher federal and state deficits. Though the federal government has promised to pay for 100 percent of Medicaid expansion for the first three years, that spending will add to the deficits. Enrollment and cost projections for expansion have been consistently underestimated.


7. It is in complete contradiction to the promises made by candidate, then President Barack Obama to the American people. The promise of “no higher taxes on families making less than $250,000 a year” pledge has long been broken. You will probably not be able to keep your current health insurance and doctor. If you can officially “keep” your doctor, you probably won’t be able to actually get an appointment with him.


Employers, Governors, and State Legislators nationwide are now dealing with the reality of implementing this monstrosity of legislative and administrative confusion. Newspaper and internet articles about problems abound. No one is doing much of anything because they are concerned that doing the wrong thing will result in increased costs, taxes, and penalties to their business and their family.


In early March the Federal Reserve reported in the “beige book” that employers throughout the country, from Atlanta to Chicago were referencing the uncertainties associated with Obamacare as their reason for both layoffs and a “slowdown” in hiring.[12] And in the meantime, federally established deadlines for state implementation come and they go with little solid action.


Recently a health care analyst made the following statement concerning the implementation of Obamacare: “The pretense of increasing quality and lowering costs was abandoned months ago; now it’s all about reducing the uninsured. If states refuse the Medicaid expansion, which the U.S. Supreme Court has ruled they can do, the whole idea of universal coverage goes out the window. And Obamacare will be judged a failure.”[13]




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