Jun 16, 2017

Why Obamacare’s Taxes Must Be Repealed

Post by Geoff Holtzman

New reports suggest that instead of repealing more of Obamacare than the House did, senators are discussing which additional parts of the law to keep. Specifically, it’s been reported that the Senate may preserve many of Obamacare’s 20 new taxes totaling $1 trillion over the next decade in order to fund new subsidies to insurance companies and continue Medicaid expansion without addressing its major failures.

These taxes drive up prices and crowd out resources for the least fortunate who are most in need of help. Keeping them would be a huge mistake.

Obamacare’s Taxes Make Things Worse

Most famous of the Obamacare taxes are the unpopular individual and employer mandates, which hit 8 million Americans each year. Additionally, there are new health taxes on insurers, medical devices and prescription drug manufacturers. These industry taxes are passed on to individuals and families in the form of higher prices.

These taxes also drive up premiums by funding subsidies to insurance companies. Subsidies keep prices artificially high by encouraging insurers to price plans according to the size of the subsidy an individual receives. As a Senate Republican aide recently put it, “[a] premium related credit means insurers can just keep charging more and know that the Feds will pay a lot of it.”

Meanwhile, the taxes expand a broken and failing Medicaid system, which harms truly vulnerable Americans by crowding out resources for those most in need. Just this week, new evidence emerged showing that Medicaid expansion prioritizes funding for the healthy over the sick and the least fortunate. This motivates states to cut services for pre-Medicaid expansion enrollees, which may help explain why hundreds of thousands of at-risk patients are currently stuck on Medicaid waiting lists.

Medicaid is a necessary safety net for Americans who truly need assistance, and should be reformed to make it more reliable for those it was meant to benefit – not the other way around.

The Senate Must Repeal Obamacare, Including All Of Its Taxes

As the Senate discusses repealing Obamacare, lawmakers must repeal all of the law’s taxes to deliver relief for consumers and avoid giving lawmakers, both present and future, a perverse incentive to expand a broken Medicaid system and send more subsidies to insurance companies.

Keeping in place Obamacare’s worst provisions, including its harmful insurance regulations and mandates, will only increase costs and reduce access to quality health care – especially for those most in need.

Delaying needed tax relief to fund the extension of those provisions is unacceptable. Rather than debate how much of Obamacare to keep, senators should adopt the policy recommendations recently put forth by Freedom Partners and Americans for Prosperity.

If senators who promised to repeal Obamacare fail to keep their word, the pain caused by Obamacare’s higher costs and fewer choices could get even worse next year for millions of Americans.