The Devastation That Is Obama Care, Part 5: Taxing Your Health Care, A Secret $63 Tax, $900 Back Braces, And More

This is a fifth in a series of posts that review and dissect the horrible consequences that Obama Care will dump on lives, our health, and our economy in the next year or so. All of this disruption will not result in any improvement in our health care costs, our health care deliverance, or our health care insurance processes since Obama Care never investigated, understood, and addressed the root causes of our health care crisis:

1. Americans eat too much.
2. Americans eat too much of the wrong types of food.
3. Americans smoke too much.
4. Americans do not exercise enough.
5. Americans are getting older on average.
6. Health industry tort reform is desperately needed but not included in Obama Care.
7. Cross state lines health insurance competition is severely restricted, competition that would reduce health care costs.
8. The Federal government subsidizes the over production of corn that results in dirt cheap corn fructose as a by product that infests most of our good supply.
9. The Federal government subsidizes the tobacco industry that produces high quality, lost cost, deadly tobacco products that Americans use to their health detriment.
10. The Federal government loses well over $100 billion a year to Medicare and Medicaid wasteful spending and criminal fraud, wealth that could be used to extend health insurance and health care to Americans who need it without raising taxes.
11. The U.S. health care system wastes well over $700 billion a year in total, waste that could easily fix the health care needs of the country without raising taxes and without instituting a mammoth and dysfunctional Federal bureaucracy.
12. The Obama administration never "followed the money" to understand where and how the U.S. healthcare system drains wealth out of the economy.

Since the Obama Care writers never understood that these were the root causes of our health care issues, their legislation has no chance of ever being cost efficient, health effective, or successful. The past four days went into excruciating detail of their failure, based on reality, statistics, and expert opinions, including the opinions of those that initially supported the legislation (e.g. the eighteen Senators who want to repeal some of the funding attributes of the law.)

The failures continue today:

1) A December 25, 2012 Associated Press article discussed the new possibility that the Federal government might start treating the health care benefits that many Americans receive and depend on today for their health care insurance coverage as regular income, subject to income tax. This new tax would affect about half of all Americans.

A few observations:

• Obama has always stated that his tax increases only affect the very rich in this country, a claim that oft repeated has been proven false any number of times. By raising the taxes on half of America, he could not longer make this boast.
• He has also boasted that if we liked the health care coverage insurance we have today, we could keep it since Obama Care would not affect what we have today. Subjecting this coverage to a new tax would certainly destroy this false boast also.

The article quotes Congressional sources which estimate such a tax on half of America would raise about $150 billion a year. We have reported many times that Medicaid and Medicare lose anywhere from $110 billion to $150 billion a year to waste, mismanagement, and outright criminal fraud. In other words, if Obama and the rest of the political class were actually doing their jobs in D.C. and running an efficient and effective government, there would be no need to hit the American taxpayer for more tax revenue.

Disgraceful.

2) Speaking of increased taxes, the Associated Press reported on December 10, 2012 that Obama Care includes another hidden “tax”, this on people with current health care insurance from their employer, that very few people know about. These medical plans are facing an unexpected Obama Care expense in the form of a new, $63-per-head fee to cushion the cost of covering people with pre-existing conditions under President Barack Obama's health care overhaul.

The original supporters of Obama Care liked to brag that Americans with existing conditions could now get “free” health care as a result of the legislation. But most realists know that nothing is free in this reality and the cost is now known: a $63 fee for about 190 Americans. Most experts expect businesses to pass this annual $63 dollar fee along to their employees and retirees, a subsidy to cover Americans with preexisting conditions.

Now, I am not saying that any human should be denied health care because of pre-existing health conditions. What I object to is the implication from Obama and his supporters that somehow there would be no cost involved with implementing this condition requirement. This cost should have been presented in an honest and upfront manner so that the true cost on millions of Americans was made clear up front.

This Obama Care fee comes out to tens of millions of dollars for the largest companies, employers say. Most of that is likely to be passed on to workers. The article quotes employee benefits lawyer Chantel Sheaks who calls this a "sleeper issue" with significant financial consequences, particularly for large employers: "Especially at a time when we are facing economic uncertainty, (companies will) be hit with a multi-million dollar assessment without getting anything back for it," said Sheaks, a principal at Buck Consultants, a Xerox subsidiary.

Higher fees without getting anything back in return. Seems like this is a recurring theme for Obama Care.

3) Did you ever wonder how Medicare and Medicaid could be so wasteful and inefficient with your tax dollars? Consider a report from the Health and Human Services Inspector General that was reported on by the Associated Press on December 19, 2012:

• Internet sale price for a standard back brace: $99.99.
• The average cost from retail suppliers of standard back braces: $191
• What Medicare pays for the standard back braces: $900-plus.

Just one example of why the government wastes anywhere from $110 billion to $150 billion a year on these Federal programs: "The program and its beneficiaries could have paid millions of dollars less if the Medicare reimbursement amount ... more closely resembled the cost to suppliers," according to the report from the inspector general’s report.

In light of the report, Medicare's administrator, Marilyn Tavenner issued a written statement stating Medicare will consider including back braces in a competitive bidding plan for medical equipment. The bidding experiment, expanding across the country, has been shown to save taxpayers money. Well, duh! Why hasn’t this then been part of the process all along, given that Medicare has probably been paying for back braces for decades. And why isn’t it standard operating procedure for all Medicare programs?

Other distressing findings form the inspector general’s report include the following:

• Medicare spends more than $10 billion a year providing beneficiaries with medical equipment, from power wheelchairs to blood sugar monitors, areas that have been rife with fraud.
• Dishonest and criminal suppliers sell Medicare customers items they may not need and bill the cost to Medicare.
• Although the $96 million that Medicare spent on back braces in 2011 was a small part of its overall spending, that amount had more than doubled in just three years, up from $36 million in 2008, the inspector general’s report said.
• Investigators decided to take a closer look, before the line item for back braces could reach the $200 million or $300 million mark.
• The article showed how unscrupulous dealers and medical professionals could use the back brace category to generate revenue without necessarily helping customers: “A reporter's quick Internet search suggested there's a thriving business in back braces. One medical supplier in the Midwest aimed its pitch directly at doctors: "Your peers are using back braces to help generate additional revenue for their office," the promotional material said. It explained how doctors can make an added $350 to $650 for each Medicare patient who qualifies for a brace.”

Disgraceful. Decades after the Medicare program was launched, the Federal government still does not know how to control runaway, wasteful pending and fraud in the program. And now Obama Care will be coming along that will make the program orders of magnitude worse and the criminal fraud component that much more lucrative for criminals and dishonest health care provider.

A new tax on hundreds of Americans that currently have health care insurance. A new fee on hundreds of Americans that currently have health care insurance. All for nothing in return and because the Federal government has proven over the decades that the only thing it can do well in the health care industry is to be criminally infested and cost cutting deficient.

But we are still not done with the insanity of Obama Care. More during the next two days on how the legislation still has not addressed the root causes of our escalating health care costs and how it will even reach out and make caring for our pets and vet care more expensive.

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