As 2014 dawns, ObamaCare’s most disruptive changes to the health care system are just now getting under way. For American businesses, that means a raft of new taxes that will pose devastating consequences for their employees and the broader economy.
Paramount among them is a new tax on health insurers (HIT) that’s projected to “hit” them for more than $100 billion over the next decade. ObamaCare’s architects intended to eat into the margins of insurers with this levy ”” and even set it proportional to each company’s market share, so that bigger insurers pay more.
But the truth is that firms in every sector will pay it, as insurers will simply pass the tax along to employers in the form of higher premiums.
Indeed, premiums are expected to jump 2% to 3% over the course of this year thanks to this tax. By 2023, they could be about 4% higher.
Given the likely continuation of Federal Reserve injection of currency into the economy, with its concomitant inflationary pressure, I find it very difficult to believe that the [b]UN[/b]affordable Care Act’s premiums in 2023 (some nine or ten years hence) will be anywhere near a scant 4% higher than 2014. If one makes the simple assumption that inflation remains flat (at the current rate of 1.5% [i]per annum[/i]) in the intervening nine years, premiums will be approximately 4.6% higher by 2017 (1.015 X 1.105 X 1.015 X 1.015).
One is prompted to inquire what sort of vegetation the authors of that estimate are smoking to cause them to arrive at an answer that will require a deflationary period to achieve?
[i]Pax et bonum[/i],
Keith Töpfer
“ObamaCare’s architects intended to eat into the margins of insurers with this levy — and even set it proportional to each company’s market share, so that bigger insurers pay more.”
This kind of stupidity is universal among liberals. They think businesses have some sort of magic repository of money. Of course, the only money they have is what they have gotten from customers.
I remember a City Council hearing I was at once where the City was trying to force the Electric Company to underground all its lines. The Electric Company representative was testifying. “Well if we do this we will have to increase rates to cover it, which will be spread among all customers. Let’s take a sample customer. In this case, the City. You are one of our larger customers and use X amount of electricity per month. Our calculations show that if we underground all our lines we will need you to pay Y million dollars a year to cover your share of that cost.”
To which the committee chair incredulously responded: “You mean we have to pay for undergrounding the lines?”
[b]Jim the Puritan[/b],
Such ignorance is hardly surprising. The majority of our fellow citizens (of all ages), as well as the majority of the future electorate, have been systematically miseducated about (at least) U.S. History, and completely uneducated about economics (both basic economics and political economy) for several generations. I know that I was largely indoctrinated (as opposed to educated) in U.S. History until the 12th grade (1963), and the only economics courses available in college (1963, et seq.) were in Keynesian economics. Had I not read Hayek’s [i]The Road to Serfdom[/i], in late 1964 I, too, would likely have remained ignorant to this day.
This ignorance/indoctrination of the populace, coupled with humanity’s general concupiscence, likely account for the poorer outcomes of the last seven or eight decades of our governance.
The only way that the electorate is going to learn is to read accurate histories (not generally found in authorized textbooks) and Austrian economists (Hayek, Mises, Hoppe, Murphy). The best sources (documented, readable and understandable) that I have found are from historian Thomas E. Woods, Jr., and from anything in Regnery’s Politically Correct Guide series. I am not sanguine that much of the current generation is likely to take an interest. I pray that I am wrong.
[i]Pax et bonum[/i],
Keith Töpfer