Two years ago, the Patient Protection and Affordable Care Act was signed into law by President Obama. He hailed it as his landmark legislation that would reform our nation's health care delivery system by expanding coverage, lowering costs and reducing insurance premiums by $2,500. Importantly, he said we could keep our current coverage if we chose to do so.
Nancy Pelosi, then speaker of the House, infamously said the House had to pass the bill to find out what was in it. What we've learned over the last two years is that what was in the law is the opposite of what was promised.
Most of the law's mandates, tax increases and Medicare cuts were back-loaded to take effect after the 2012 election. So, while there has been ample negative impact thus far, the real negative jolts to consumers and businesses are yet to come.
The simple fact is that coverage is not expanding. Despite a $5 billion price tag, the high-risk pool, which the law intended to cover 375,000 people, has only 45,000 enrollees. Disturbingly, more workers are losing their health insurance as employers drop coverage due to the law's unaffordable costs and requirements. A McKinsey Group report found that more than one half of employers with high awareness of the law said they will stop offering health coverage.
Coverage mandates are having a chilling impact on job creation. I recently toured a technical manufacturing business in Steuben County. The quality of the company's work force, products and management has won business at home and abroad. Business is going well and it could hire more workers, but it is holding at 48 employees. Why? Because by exceeding 50 employees, the company will be subject to harsher requirements. The business legitimately fears anticipated health care cost increases when the law is fully implemented next year.
Then there is the promise of lowering insurance premiums by as much as $2,500.
Again, the opposite has happened as health care premiums continue to rise at a rate much higher than inflation. A Kaiser Family Foundation report found that health care premiums in the workplace increased 9 percent, or more than $1,200, for an average family, in the year after the law was enacted.
In addition to paying higher premiums, workers are increasingly being pushed into plans with higher deductibles. From 2009 to 2011, the percentage of workers enrolled in high-deductible health plans doubled from 8 percent to 17 percent (so much for keeping your current plan if you like it). Premiums will rise even more in 2014, when the Health Insurance Tax portion of the law begins to apply. This new tax is charged to all health insurance companies based on their net premiums written. The tax will raise the cost of health insurance on 2 million small businesses and, in turn, tens of millions of employees. The health tax will cost businesses and employees $8 billion in 2014, with projected increases to $14.3 billion in 2018. There is neither an expiration date nor a growth cap on this new tax.
The law also will have a devastating impact on Medicare, with a $500 billion reduction in funding. Medicare physician payment rates are 20 percent lower than what they receive from private health plans. Physician groups have warned these cuts will force many to stop seeing Medicare patients. More than 90 percent of senior citizens will likely lose the retiree prescription drug coverage they have and see nearly double-digit premium increases. Additionally, because TRICARE reimbursement rates are directly tied to Medicare, health care for military personnel will be impacted as well.
The law establishes the Independent Payment Advisory Board, which is charged with determining what services will and will not be paid for. There is no requirement that the board hold public meetings or hearings or consider public input.
The Affordable Care Act is also poised to explode our nation's deficit. According to the Congressional Budget Office, the Community Living Assistance Services and Supports (CLASS) program was a key funding source. Many questioned the viability of CLASS, saying it could not be relied upon to offset the overall costs of the law. Now even the Obama administration admits the CLASS program is unsustainable and that it will stop its implementation. So where will the funding come from? Unfortunately, we will be forced to borrow it if the law is not repealed.
Furthermore, the $5 billion in funds for the Early Retiree Reinsurance Program portion of the law, which was supposed to be in place through 2014, is nearly exhausted. The cost of the law's subsidies has jumped by $111 billion from just last year. The CBO estimated the law will raise taxes more than $400 billion by 2019, and increased the projected cost from $938 billion by 2019 to $1.8 trillion by 2022. Again, more will have to be borrowed. More than a half billion dollars in cut-rate loans and federal retiree reinsurance subsidies have been handed out to questionable exchanges, unions and state and local governments.
It is clear that the Affordable Care Act overpromises, overspends and underperforms -- all at the expense of hardworking taxpayers.
What can we do? On Monday, the Supreme Court will hear arguments brought by 26 states regarding the constitutionality of the individual mandate. In a recent Gallup poll, 72 percent of Americans said requiring individuals to purchase government-mandated health insurance even if they can't afford it is unconstitutional. I hope the court agrees with this common-sense interpretation of the Constitution.
Legislatively, we need to continue to carry forward the good patient-centered insurance reforms in the law. Requiring coverage for pre-existing conditions, allowing children up to age 26 to be carried on a parent's policy and covering preventive health care services like mammograms for women are examples of good reforms.
We need to find a new path forward that abandons the "fee for service" model of health care billing and its perverse incentive that rewards inefficiency and redundancy. Payment systems for providers should reward efficiency and the highest quality of care as determined by the patient, not bureaucrats or administrators. We also need effective tort reform that prevents the cost escalator associated with frivolous lawsuits and the waste generated by defensive medicine.
During the debate on the Medicare "doc fix," I met with a doctor from the Southern Tier to discuss the impact that extending or not extending the rate would have on his patients. While the meeting was solely about Medicare, I asked: What is the single most important thing I could do to help you and your patients?
"Repeal Obamacare," was the doctor's simple answer. I agree.
We need to scrap this poorly conceived monstrosity and reform our health care system in a way that does not push greater numbers of people into government-run plans as they lose coverage. We must do so in a way that does not discourage job growth. Most importantly, we must do so in a manner that deals with the overall rising cost of services. This law ultimately jeopardizes the very underpinnings of the leading health care system in the world by treating a few insurance symptoms but ignoring the true cost -- disease.
Rep. Tom Reed, R-Corning, represents New York's 29th Congressional District.