By Dave Andrusko
In the run-up to and passage of ObamaCare, there were a number of memorable quotes. We talked yesterday about one grossly mistaken promise from President Obama: “If you like your [insurance] plan, you can keep your plan.”
But that paled in comparison to then-Speaker of the House Nancy Pelosi’s inadvertent admission. Referring to Obamacare, which was the size of multiple telephone books and whose contents were a mystery to most everyone, she famously said, “We have to pass the bill so you can find out what’s in it.”
As ObamaCare continues its rollout, we are finding out more and more about what exactly is in the “Affordable Health Care Act.” And the number and types of critics continues to grow.
Also on Wednesday’s Jennifer Popik, JD, did an excellent job unspooling the truth behind the impact of t he massive ObamaCare tax on most health insurance plans (see “Obamacare tax on health insurance will affect most plans over time, reducing healthcare”). Her post is very much worth reading.
Less than 24 hours later we read this in today’s Washington Post: “Fairfax utility: Obamacare will likely lead to dropped coverage.” Fairfax is a city just south of Washington, DC, and the utility referred to is the Fairfax County Water Authority.
To her credit Post reporter Laura Vozzella pulls no punches and refuses to adopt the Obama administration line—that health insurance policies that are not as parsimonious as ObamaCare wants can be derisively mischaracterized as “Cadillac” plans.
The heart of the letter, written by Burton Jay Rubin, chairman of the authority’s government relations committee, is that if the “Cadillac Tax” takes place as planned in 2018 [a 40% excise tax on insurers], the authority “will likely drop insurance coverage for its nearly 400 employees,” Vozzella writes.
“[I]t is irrefutable that the ACA is fatally flawed,” wrote Rubin. “If it is intended to make health care coverage available to those who do not have it, it does so only by jeopardizing the coverage earned by those who have it.”
As Ms. Popik explained yesterday, organized labor as well as larger (and smaller) businesses have great problems with this tax which starts in five years but then greatly increases over the following decade. The wrinkle in Vozzella’s story is to have a “quasi-public entity,” like the Water Authority, “weigh in.”
Vozzella’s account mirrors a key observation made by Ms. Popik. ObamaCare has a threshold after which the excise tax kicks in—any plan “that cost companies more than $10,200 a year for individuals and $27,500 for families,” Vozzella writes.
Bradley Herring, a health economist at Johns Hopkins Bloomberg School of Public Health, tells Vozzell that about 15% of insurance plans will hit that threshold in 2018. But by 2025, that figure will be about half “because of rising medical costs. The law calls for the threshold to rise 2 percent a year — well below typical medical inflation, which the authority said is projected at 8 percent annually.”
Rubin said that by 2018 the Fairfax County Water Authority expects to pay $13,450 to cover individual employees and $33,300 per employee family for coverage. “That would make the utility subject to enormous taxes — much higher than the tax it would pay if it provided no coverage at all,” Vozzella explains. The logic is inescapable, as Rubin wrote: “[I]f we provide our workforce with no health care coverage, we merely pay the Government $2,000 for each employee.”