Obamacare hurts state business but Republicans must back off
Kalamazoo-based, medical-products maker Stryker Corp. says Obamacare’s 2.3 percent medical device tax will cost the company $100 million this year, reducing its research and development budget by over 20 percent – meaning a loss of 1,000 workers. The Fortune 500 company is just one of many Michigan employers being negatively impacted, making the state a witness to the national economic harm that Obamacare has wrought, even before state health exchanges mandated under the health care law open Oct. 1.
But instead of constructive solutions, Washington Republicans are offering more chaos by threatening a government shutdown if the Affordable Care Act is not defunded. The House GOP should use the opportunity to reach out to disgruntled Democrats and propose consumer-based reforms that will smooth Obamacare’s flaws, reduce costs and expand coverage to the uninsured.
Stryker is concerned with the “medical device excise tax and its negative impact on jobs and innovation,” says CEO Kevin Lobo. At his 10 Subway sandwich shops, Michigan businessman Ken Adams has switched to hiring part-time workers to avoid Obamacare’s expensive, employer health mandate. He added 25 part-time workers this summer while reducing other employees’ hours. “We won’t start hiring full-time people,” Adams told The Wall Street Journal, even with the delay of Obamacare’s employer mandate until 2015. Cities like Dearborn have alarmed unions by also planning reduced employee hours. Meanwhile, the General Accountability Office has warned of the “potential for implementation challenges going forward” for Obamacare exchanges. Translation: They won’t be ready come October.
No wonder some of the Obama administration’s biggest allies are rebelling.
Michigan Sen. Debbie Stabenow and 17 of her Democratic colleagues want the medical device tax thrown out. Investor Warren Buffett wants the entire act repealed, warning that if “you project what has been happening into the future, we will get less and less competitive.” And Terry O’Sullivan, president of the Laborers International Union, said last week that if the “Affordable Care Act is not fixed. . . then I believe it needs to be repealed.”
But it won’t be repealed or defunded by a Democratic Senate. That should be a signal to House Republicans to woo disaffected Democrats with alternatives – not derail the government in a game of budget chicken. Nixing the medical device tax is a good start. So is postponing the individual mandate and ending special subsidies to Congressional staff as U.S. Rep. Dave Camp, R-Midland, has proposed.
But Republicans would be most effective if they were proactive about addressing the uninsured problem.
According to the Congressional Budget Office, most people who become uninsured – 71 percent – are reinsured within a year. These temporary periods of no insurance are largely the result of a transient workforce and tax rules that tie insurance to jobs, not people. So Congress should extend the same tax credits businesses get to individuals, thus making health insurance portable.
For the needy and the elderly, Washington could simplify health exchange regulations, provide premium support to individuals and allow them to use exchanges to choose their own plans as Utah and Florida have proposed.
As it happens, this consumer-based model has been introduced by physician-turned-Congressman Tom Price, R-Georgia, and is similar to Switzerland’s health system, which ranks with the U.S as having the world’s best health outcomes while providing universal health coverage.
U.S. health costs have decreased in recent years thanks to increased employer use of co-pays – that is, increased consumer involvement in health costs. In Switzerland, individually-purchased health care has kept per-capita health expenditure growth at 4.6 percent – below the OECD countries average. Republicans should shelve their shutdown fantasies. Consumer-based and portable health coverage can be a reality.