Obamacare’s Real Costs

November 19, 2012 by Bob Livingston

PHOTOS.COM
“The Obama Care Health Care Reform Plan or Health Care For America Plan will cost the average American around $70.”–obamacarefacts.com

First of all, allow me to disabuse you of the notion that Obamacare has anything to do with “health” care. Obamacare is not about health. It’s not about lowering the cost of health insurance. And it’s not about ensuring that everyone is insured.

It is about locking more Americans into the clutches of the Big Pharma/Medical Industrial complex, providing more customers for Big Insurance and confiscating more wealth from individuals and businesses.

The American healthcare system should properly be called “sickcare.” It’s a subtle and esoteric system of population control with prescription drugs issued at the public expense by the drug cartel — the conglomerate of pharmaceutical houses.

They commit population control under the pretense of “healthcare” and make people pay for it. And this medical cartel has no legal liability. It is forced — or at least deceptive — medication. And most doctors don’t have a clue. They write prescriptions based on falsified data and kickbacks — from speaker fees and ghostwriting glowing medical reviews — without regard to whether their patients will benefit.

Health costs nothing. Sickness care has us in bankruptcy. If the medical establishment, insurance companies and Obamacare writers wanted Americans to be healthy, they’d promote healthy eating, healthy lifestyles, vitamin D supplementation, natural supplements and alternative health choices rather than toxin-laden vaccinations, body-destroying cancer treatment drugs, harmful symptom-rather-than-cause-attacking heart, statin and diabetes drugs, and carcinogen- and GMO-laced processed foods.

Now Obamacare’s devastating financial effects are coming to the fore. They can be seen in the rising costs of health insurance, layoffs, cuts in employment hours, rising prices and looming tax hikes. Obamacare will send unemployment numbers skyrocketing and force workers — who find their hours cut back below the “full-time” threshold of 30 hours — to try to find multiple part-time jobs to make ends meet. Or they’ll give up working altogether and join the rising numbers of wards of the state: 49.7 million in poverty, non-farm employment at 2005 levels, 46.7 million on food stamps and 9 million leaving the workforce and joining the disability roles.

The Congressional Budget Office predicts Obamacare will cost 800,000 jobs by 2020-2021. It will be much worse than that.

With jobless numbers already high and manufacturing and mid-level white collar professional service jobs leaving the United States never to return, most new jobs come in the healthcare, social assistance (ambulatory healthcare services) and food service industries (waiting tables and tending bar).

But the medical device and food service industries are being hit hardest by Obamacare, as business owners seek ways to remain profitable and competitive once the provisions kick in.

During the International Franchise Association convention in Washington, D.C., in September, franchisers learned just how hard Obamacare would hit them. David Barr, a Taco Bell and Kentucky Fried Chicken franchiser, told the group how Obamacare will cut his profits and probably theirs as well — in half. Their only choice is to slash employee hours so they aren’t eligible for company-paid health insurance or stop offering insurance and pay the $2,000 per employee fine.

Barr has 23 stores with 421 employees, 109 of whom are full-time. Of those, he provides health insurance to 30. His total cost is $129,000 per year and his employees pay $995. Under Obamacare, he’ll have to provide health insurance for all 109 full-time employees at a cost of $444,000 per year. The $315,000 increase is more than half his annual profit, after expenses. If he chose the fine instead, his healthcare costs would still increase by $89,000 per year.

Darden Foods, the world’s largest casual dining company — it includes Olive Garden, Red Lobster and LongHorn Steakhouse — was one of the first to announce it would be limiting worker hours to avoid healthcare requirements. Papa John’s CEO John Schnatter said the cost of his pizzas will rise between 11 and 14 cents and worker hours will be reduced. He expects the law to cost his company between $5 million and $8 million annually.

In July, McDonalds Chief Financial Officer Peter Benson said Obamacare will cost his company $420 million in new healthcare costs even though the company received a waiver from the Administration of Barack Obama. His menu prices will increase as a result.

Florida-based restaurant owner John Metz, who owns 40 Denny’s restaurants and the Hurricane Grill & Wings franchise, said last week he would be tacking a 5 percent Obamacare surcharge on his meals and reduce employee hours. He says it is “the only alternative. I’ve got to pass the cost to the customer.”

Look for other restaurants faced with a choice of becoming unprofitable by absorbing the costs or uncompetitive by raising their menu prices if they insure their employees and pass the cost to consumers to also cut worker hours.

Wal-Mart recently raised its health insurance premiums as much as 36 percent, putting coverage out of the reach of many of its employees. Its executives say employee hours will be cut. Likewise, the Kroger grocery chain is also reducing employee hours.

Other companies that have announced Obamacare layoffs include:

  • Welch Allyn: A medical diagnostic equipment manufacturer, Welch Allyn will lay off 250 employees, or 10 percent of its workforce, over the next three years because of the Medical Device Tax mandated by the law.


  • Dana Holding Corp.: A global auto parts manufacturer, Dana Holding Corp. will cut its workforce of 25,500, citing $24 million in additional healthcare expenses over the next six years.


  • Stryker: One of the biggest medical device manufacturers in the world, Stryker will close its Orchard Park, N.Y., facility, eliminating 96 jobs in December. The company will also eliminate about 5 percent of its remaining workforce — about 1,170 workers.


  • Boston Scientific: CEO Ray Elliot recently announced that Obamacare taxes will force him to lay off between 1,200 and 1,400 workers and shift investments and jobs to China.


  • Medtronic: The medical device maker cut 500 jobs this past summer and will eliminate another 500 in 2013 because of Obamacare taxes.


  • Smith & Nephew: 770 layoffs.


  • Abbott Laboratories: 700 layoffs.


  • Covidien: 595 layoffs.


  • Kinetic Concepts: 427 layoffs.


  • St. Jude Medical: 300 layoffs.


  • Hill-Rom: 200 layoffs.


And then there are the looming taxes.


The undocumented alien and chronic White House liar (see the ever changing Benghazi narrative, among others) has repeated ad nauseam that he will not raise taxes on those making less than $250,000 ($125,000 or $200,000 or whatever his story is today).

But here are some Obamacare taxes kicking in beginning in 2013, most of which will hit both the so-called “rich” and the poor either directly or indirectly.


  • The Obamacare Medical Device Tax is a $20 billion tax increase. Obamacare imposes a new 2.3 percent excise tax on gross sales — whether the company makes a profit or not. This will increase the cost of medical devices like pacemakers, prosthetics and wheelchairs.


  • The Obamacare “Special Needs Kids Tax” is a $13 billion tax increase. It hits the 30 million to 35 million Americans using a work-based Flexible Spending Account (FSA) to pay for basic medical needs by having money removed from their paychecks before taxes, which reduces their taxable income and helps them save on their tax bill. It faces a new cap of $2,500 (currently the accounts have no cap). There are 7 million families in American with special needs children who need care that far exceeds the $2,500, many of them the working poor.


  • The Obamacare Surtax on Investment Income is a $123 billion tax increase. This is a new 3.8 percentage point surtax on investment income earned in households making $250,000 or more ($200,000 for single filer). This will increase the tax on capital gains from 15 percent to 23.8 percent. Capital gains include profits on the sale of a home. In other words, when you sell your house for more than you paid for it, which all homeowners hope to do, you will pay 23.8 percent on the value difference when you sell. It also includes gains made on savings and retirement accounts. The rate paid on dividend income increases from 15 percent to 43.3 percent, as does the rate on other investment income.


  • The Obamacare “Haircut” for Medical Itemized Deductions is a $15.2 billion tax increase. Currently, Americans facing high medical expenses are allowed a deduction if expenses exceed 7.5 percent of adjusted gross income. The “haircut” raises the threshold to 10 percent. This will most harm those near retirement age and those with modest incomes but high medical bills — like those with special needs children or dealing with catastrophic illness.


  • The Obamacare Payroll Tax Hike is $86.8 billion tax increase. The Medicare payroll tax rate on individuals earning $200,000 ($250,000 for couples) will see their payroll tax increase from 2.9 percent to 3.8 percent. This is a direct marginal income tax hike on small-business owners, who are liable for self-employment tax.


And even more Obamacare taxes kick hit in 2014.

The bottom line for the average family, according to Forbes.com, is an additional annual cost of $1,261 for the average family, or a diversion of 2.5 percent of the average household’s income in taxes alone. And this doesn’t factor in the additional costs resulting from rising food and product costs and loss of income due to worker hour reductions and job losses.

Obamacare sycophants glommed on to the progressive, government-growing, insurance industry-profiting healthcare reform effort largely because they believed Big Insurance was screwing them over by raising premiums and not paying for certain conditions. Yet those hated insurance companies wrote the law and made sure that those who disdained health insurance — either because they were young and felt they didn’t need it or were financially able to go without it — were forced into the plan, ensuring Big Insurance a whole host of new customers, guaranteeing themselves a large profit and a government treasury to make sure the bills were paid. And those sycophants are just delighted with that outcome.

But if they thought they were drawing the short straw when corporate profits were on the line, wait until they see what they get now that the sociopaths in the dysfunctional government bureaucracy are involved.
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Updated to accurately reflect that Schattner expects Obamacare to cost his company between $5 million and $8 million annually, not $5 billion and $8 billion as first reported. We regret the error.

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