Obamacare: You Ain't Seen Nothing Yet

Obamacare will impact jobs and our economy in negative ways.  The Congressional Budget Office (CBO) report, recently released, shows just how much it will impact.  No matter the economic viewpoint held, it becomes clear that this legislation will devastate the American family and our economy.  Whether one believes that economic growth spurs from consumers keeping money in their pockets or lower spending of the government, both are losers in this case.  

Furthermore, the CBO report only looks at the impact of Obamacare on the budget.  It does not account for shortfalls or further reaching effects on our budgeting and economic outlook.  In other words, it does not weigh the impact on our already failing systems of Medicare, Disability or any of the Social Security programs that already struggle.  The biggest of these impacts is Medicare.

Medicare Impact and Result

Medicare enrollment is projected to increase from 34 Million (pre-ACA) to 47 Million by 2023.  This represents a 38% increase in enrollment.  This increase represents a cost of $710,000,000,000 over this same period, if funded by increased taxes.  As of 2013, Medicare (HI) was projected to be depleted by 2026.  It is unclear whether or not the increase in Medicare enrollment was accounted in the Trustee's Annual Report of 2013.  However, it is clear that the Trustee's use a baseline of the current year for their calculations.  With the increases in Medicare enrollee's hitting hardest in 2014, it is likely we will see ugly numbers come 2015.

KEY DATES FOR THE TRUST FUNDS

	OASI	DI	OASDI	HI
Year of peak trust fund ratioa	2011	2003	2008	2003
First year outgo exceeds income excluding interestb	2010	2005	2010	2018
First year outgo exceeds income including interestb	2022	2009	2021	2021
Year trust funds are depleted	2035	2016	2033	2026

Employer Based Insurance

11,000,000 people will lose their employer based insurance by 2019, according to the CBO.  However, it is believed that 4,000,000 of these individuals will obtain coverage through the exchanges.  By 2023, the average subsidy will reach $7,900 per individual.  

What happens to the other 7 Million people who will lose their employer based insurance?  It is believed that these people will fall into one of two categories; Medicare or uninsured.  

The Net Effects

The CBO report offers more insight into what they believe will be occurring over the next few years.  The net effects are hard to predict, due to the size and scope of this legislation.  Throughout the report, assumptions are made in order to measure the effects in a statistical analysis.  

• It is projected that the non-elderly uninsured will decrease from 55,000,000 to 31,000,000 by 2016.  This still leaves a lot of people uninsured, which was the point of this legislation. According to the report, only 2-3% of these individuals are illegal immigrants.  One finds it hard to believe there are only this many illegal immigrants, or we can conclude that they are being covered by Obamacare.  
• Costs will grow astronomically from 2014 through 2023.  While the total impact on the deficit is $49,000,000,000 in 2014, it grows to $170,000,000,000 by 2023.  This is in addition to our already burdensome $17,500,000,000,000 deficit we currently have at this time.
• Costs extend beyond the deficit; they also impact individuals and families.  All spending is taxation, and therefore, the true impact of the legislation can also be measured in the total cost on Americans.  Table 2 shows more than the impact on the deficit, it also measures the overall net effect on Americans.  In order to do this, we must add the gross cost of the coverage, plus all the taxes and penalties incurred on the people, directly and indirectly.  By 2023, (assuming our population grows to 320 Million) the cost to Americans will be $520,000,000,000 per year or $1,625 per individual per year!  This means, the average family of 4 will be impacted with an additional tax bill of $6,500 per year.  Keep in mind, this is Obamacare only; it does not include the other spending we are currently doing as a country.  

If individuals (320 million of them) have $1,625 less to spend each year, is it not hard to believe that our economy will tank?  If the government spends more than it takes in already, then we add an additional $1.4 Trillion over the next 10 years, won't it paralyze us?  

Furthermore, we still do not know the net impact of health care costs on individuals and families under this plan.  Both sides continue to cherry pick stories of horror and success, but what is the net effect?  It is not surprising that there are winners and losers under this legislation; that is how government intervention works.  This net effect on premiums, etc. will not be known until the law is fully implemented, which is a moving target.  

As is widely known, this legislation is political in nature.  Is it any wonder that the implementation was initially scheduled for 2014 (before mid term elections), but has now been delayed for its' highest impact in 2016?  And, as shown by the information passed along by the CBO, the strongest impact is the implementation of the employer mandate.  This has been repeatedly delayed and is now slated for 2015.  

Dependence or Independence?

America is coming upon a crossroads; choosing dependence or independence.  Recent studies highlight the dependency difficulties we face.  The biggest question is; does anyone in Congress or the President have the spine to do something before it is too late?  Or, is it too late already?  It is up to the voters, our voices, and communication vehicles to change the course of this country. Some have begun to push this knowledge out and share in respectful avenues.  Many Americans may not realize what our dependence issue is, because it is not being seriously addressed. America must make a choice between dependence and independence.

In my recent piece, Base-less...Boehner Shows His True Stripes, I discussed how the top 40% are now paying 106% of the Federal Tax burden.  Meanwhile, the bottom 40% are now saddled with a -9.1% "burden".  This is dependence at its' most extreme, using the government to steal hard-earned income to give away to others.  

An independent solution would be to revise the tax code.  Different groups have different preferences how to accomplish the overhaul.  There are several solutions, but the most popular major overhauls would be the Fair Tax and Flat Tax.  One can advocate for whatever they choose, but most Americans would agree that the Tax Code needs reform.

As discussed in Budget "Battle" Ends on an "Embrace the Suck", 65% of Americans agree that spending needs to be cut.  It is doubtful Americans are tying the spending to government dependence. Most people do not follow the numbers that closely.  Spending is a major driver of the loss of independence in our country.  We are bound by government spending and dependence.

Government dependence is a major driver of our deficit (now near $17 Trillion).  Some of the statistics, when charted, are simply astounding and scary.  For the small portion of the country carrying the weight of these government dependence programs, it is frightful. At 70% of the Federal budget, and growing, this is simply unsustainable.

The only independent solution is to educate those who have not been paying attention.  Every person has their favorite government program or handout or subsidy.  It must be understood that nothing can be off the table; defense, welfare, Social Security, Medicare, Medicaid, etc.  People have been trying, for years, to accomplish this with some luck.

The following charts illustrate just how expansive growth has been in government dependence.  An extensive study was just released in late November that details even more about government dependence. If you would like to read even more detail, it can be found here.

The choice is, become independent again as a society.  Or, be harnessed and dependent on the government.  If demands are not made, the government will not change course.  And, if the government does not change course, then these programs will be cut harshly when we run out of money.

Another "Unintended" Consequence of ObamaCare

Last night, we celebrated yet another retirement for a co-worker of mine.  That would make 5 in the last 15 days or so.  Are some of these people ready for retirement?  No, not really. Then, why retire?  They are retiring because Obamacare is forcing our near retirement employees to retire early.  This occurrence, while certainly not unheard of, is rippling across the country right now.  It is another consequence of this crap legislation taking away people's freedom.

I work for a rather large Corporation which will go unnamed and is irrelevant in this discussion.  After all, it is not the Corporation that is necessarily causing this consequence of early retirements.  Arguably, I would call it forced retirement.

The Corporation was forced with a decision due to ObamaCare; either cut subsidies to existing employees or eliminate a generous Medical Premium Savings Account that was funded based upon our years of service to the company.  Rather than hurt their existing employees, they opted to eliminate our Medical Account.  The Medical Account served as a bridge to subsidize our health care costs from retirement until Medicare was available.

Long time employees had accrued as much as $28,000 in this Medical Premium Savings Account over their careers.  To reallocate the funds towards our health care premium subsidies, they eliminated the contribution and had to take back all funding that was not going to be used by retirees.  In order to do this, they gave employees the opportunity to retire prior to December 31, 2013 and keep their accounts or lose them all together.