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What a Difference a Year Makes

March 23, 2011

Today, March 23, 2011, marks the one-year anniversary of the American people living under the Democrats’ health care law.  A look back at the calendar reveals everything we need to know about the law on its first anniversary – higher premiums, fewer jobs, more regulations, and more federal spending – and despite promises to the contrary, most in America will not get to keep the plan they have and like.  Take a closer look at the month-by-month snapshot of what the Democrats’ health care law really means for America:

March 2010:  Higher Costs for Employers, Fewer Jobs for Workers & States Revolt
With the ink barely dry, major U.S. employers announced the Democrats’ recently enacted health care law would
cost them nearly $1 billion, threatening their ability to hire new workers and retain existing employees.  On March 23, 13 of what ultimately would become a total of 26 states, filed a lawsuit in a Florida federal district court against the Obama Administration arguing that the individual mandate and other provisions of the Democrats’ health care law violate the U.S. Constitution.  That same day, Virginia also filed a lawsuit asking a federal district court to void the law in its entirety. 

April 2010:  Higher Health Care Spending & Seniors’ Health Care in Jeopardy
On April 22, the Obama Administration actuaries 
reported that the health care law will increase national health care spending by $311 billion over the next ten years (bending the cost curve the wrong way) and the over one-half trillion dollars in cuts to Medicare could jeopardize seniors’ access to care.

May 2010:  Myth of Small Business Credit Dispelled as Employers & More States Join the Repeal Effort
On May 14, National Federation of Independent Business (NFIB), the nation’s largest small business organization, and seven additional states joined the lawsuit filed in Florida bringing the total number of states involved in the lawsuit to 20 at that time.  On May 17, the IRS issued a notice on the small business tax credit – but many small business owners were
disappointed to learn they are ineligible for the credit because they either pay their staff too much, have too many employees to qualify, or a combination of the two.  It was particularly surprising that small businesses that appeared eligible for assistance because they met the law’s criteria (average wages below $25,000 and fewer than 25 employees) were often still ineligible for the tax credit because of the formula in the Democrats’ law.  This affirmed an earlier report from the non-partisan Congressional Budget Office (CBO), which estimated that 88 percent of those who get health insurance from a small employer do not work for an employer that will benefit from the tax credits under the Democrats’ legislation.  NFIB summed up the feeling best when it said, “the small business tax credit will do little to nothing to make purchasing insurance affordable for more small firms.”    

Less than two months after enactment, CBO released an analysis of the Democrats’ health overhaul, focusing on spending they had not previously quantified.  The higher spending reflected increased administrative costs to the federal government for implementing and monitoring the new health law as well as a variety of new government grant programs.  All told, CBO predicted federal spending will increase by an additional $115 billion over its original cost estimate of the Democrats’ health law.  

June 2010:  White House Admits You Can’t Keep What You Have and Like
The Obama Administration issued “grandfathering” regulations detailing very strict guidelines for the changes employers can make to their health plan without losing “grandfathered status.”  This is particularly important because if an employer loses grandfathered status then they must change their health plan to meet new federal mandates that could make health insurance more expensive for employers and employees.  Despite repeated promises that everyone would be allowed to keep the health plan they like and have, this rings hollow as the Obama Administration’s own analysis shows that as many as
7 in 10 employer health plans will be forced to change to comply with the mandates in the new law. 

July 2010:  Entire States Seek to Be Exempt from the Democrats’ Health Care Overhaul, Americans Begin Paying Higher Taxes, & Individuals Start Losing Their Health Insurance
The first of what would become nine states applied for a waiver from the Democrats’ health care law requirements in order to protect their residents’ access to affordable health care. 

On July 1, the new 10 percent excise tax on indoor tanning services went into effect – the first of over one-half trillion dollars in new taxes to come.  Not surprisingly, the Obama Administration failed to tout this milestone.  Also in July, the first insurer to go out of business is revealed when Virginia health insurer, NHealth, announced they would be shutting down their operations as a result of the Democrats’ health law.  Subsequently, more insurers, including some of the largest in the country, announced they are no longer offering coverage to small businesses or individuals in a number of states. 

August 2010:  Seniors Learn They Will Lose Retiree Prescription Drug Coverage
The Medicare Trustees annual report predicted that the number of seniors receiving prescription drug coverage through a former employer will “decline quickly” and
90 percent of seniors with retiree prescription drug coverage would lose it as a result of the Democrats’ health care law. 

September 2010:  Employers Forced to Get a Waiver or Cancel Insurance
Despite assertions by President Obama that the Democrats’ health care law will help employers, a Wall Street Journal report revealed that a provision of the new law that prohibits the offering of health plans often purchased by employees in retail and restaurant companies threatens 1.4 million Americans’ health insurance.  The unwelcome news sparked a nationwide dialogue about the decision made by the Obama Administration to provide waivers from a major provision of the new health care law.  The move prompted some to claim that the waiver process is an implicit
admission by the Administration that without fundamental change, the Democrats’ health care law would result in those who are insured becoming uninsured.

October 2010:  Workers Forced to Pay Higher Health Care Costs
On October 18, Aerospace giant Boeing
told employees they will pay substantially more for health insurance coverage because “[t]he newly enacted health care reform legislation… is also adding cost pressure as requirements of the new law are phased in over the next several years.”

November 2010:  American People Back GOP Pledge to Repeal
Republicans’ Pledge for America, of which a centerpiece is the repeal of the Democrats’ health care law, receives the strong support of the American people on Election Day.

December 2010:  Law Declared Unconstitutional
On December 13, Federal District Court Judge Henry Hudson confirmed what most Americans across the country believe – the health care law exceeds Congress’ constitutional authority to regulate Americans’ lives.  In the case brought by Virginia Attorney General Ken Cuccinelli, Hudson declared the law’s mandate that nearly every American purchase government-approved health insurance to be unconstitutional. 

January 2011Law Again Declared Unconstitutional and Insurance Companies Stop Offering Coverage
Americans with Flexible Spending Arrangements (FSAs) and Health Savings Accounts (HSAs) were prohibited from using these funds to purchase over-the-counter drugs without a prescription.  On January 19, the House of Representatives, in a bipartisan vote, voted to repeal and replace the Democrats’ health care law.  On January 31, Federal District Court Judge Roger Vinson ruled in the Florida lawsuit that the individual mandate is an unconstitutional exercise of Congress’ Commerce Clause power.  His ruling is the most far-reaching rebuke of the law, because Vinson said the provision cannot be severed from the rest of law, and therefore declared the entire law void. 

A major insurer stops offering health insurance to small businesses and individuals without employer insurance because of new rules established by the Democrats’ health care law.  The erosion of health insurance offered results in Americans being forced to change their health care plan or becoming uninsured. 

February 2011:  Administration Admits to Budget Gimmicks & CBO Says Law Will Mean Fewer Jobs
On February 7, the Department of Health and Human Services (HHS) Secretary Sebelius admitted that the CLASS Program, a new government-run long term care insurance program set up to help “fund” the Democrats’ health law, is “totally unsustainable.”  Providing more support that the health care law costs jobs, CBO Director Elemendorf testified February 10th that the health care will shrink the workforce by 800,000

March 2011:   While Employers Struggle, Unions & State Governments Get Help; Waivers Total More than 1,000
In a March 2 report, the Obama Administration
acknowledged that participation in the Early Retiree Reinsurance Program (ERRP) is dominated by government employees and unions.  Nearly six-in-ten (58%) entities receiving the federal subsidies are unions or state and local governments.  Days later, the Obama Administration once again admitted the Democrats’ health care law is unworkable, announcing that it has granted more than 1,000 waivers from various portions of the law.  The State of Maine is the first of the nine states seeking a waiver from major provisions in the law to be granted the waiver on the basis that if forced to comply with the law only one private insurer would be left in the State.  Ironically, the HHS website describes the waivers as “Helping Americans Keep the Coverage They Have,” an admission by the Obama Administration that the only sure way for Americans to keep what they have and like is to give them a waiver from the law.  Finally, despite promise after promise that the law would lower costs, a New York Times story confirms what so many already know – health care premiums continue to soar.