‘Obamacare’ tax hikes vs. tax breaks: Which is greater? -WaPo - but this isn't the complete picture.

[Bill USA]

http://www.washingtonpost.com/blogs/fact-checker/post/obamacare-tax-hikes-vs-tax-breaks-which-is-greater/2012/07/06/gJQAx6AyPW_blog.html

Republicans have seized on the Supreme Court’s health-law ruling to blast the Affordable Care Act as a giant tax on the middle class. Rush Limbaugh went so far as to call it the “biggest tax increase in the history of the world,” a preposterous claim we debunked in a previous column.

On Sunday, White House Chief of Staff Jack Lew refused to acknowledge that the individual mandate represents a tax, even though the majority of the Supreme Court justices defined it as such. He called the enforcement measure a “charge” that would apply only to a small fraction of the population, and that “more middle-class people are going to get a tax cut.”

Let’s look at the numbers to determine whether tax breaks or tax hikes — including the mandate — will be greater under “Obamacare.” We’ll focus on the number of people affected by both aspects of the law, since that’s what Lew talked about. But we’ll also review the monetary totals, just for good measure.

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New revenue: $459 billion (including $30 billion in penalties)

Credits and subsidies: $343 billion

(Note: These totals reflect only 2012 through 2019, since those were the only common years between the CBO and JCT tables.)

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Now this analysis is okay as far as it goes but there is more to be considered in terms of the entire effect of the ACA.

Let's assume that 70% of the uninsured obtain health insurance due to ACA (35/50 = .7)

It is a fact that Hospitals in providing care for the uninsured who can't pay their bills increase the rates they charge everybody else. This increases premiums for everybody who has private health insurance. In 2008 the increase costs passed on to private insurers by hospitals providing care for the uninsured came to: $42.7 Billion (link). Inflating these costs from 2008 to 2012 at 3% per year (the rate of Health care costs inflation since Obama "came to town&quot and continuing that rate of inflation through 2019 and summing the years 2012-2019, you get a total cost passed onto insurance companies (and policy holders) of: $427 billion. 70% of that figure comes to: $299 Billion. This figure represents the expected total reductions to insurance premiums over the period 2012 - 2019.


Government's state, local and Federal also reimburse hospitals for their provision of uncompensated care. This bill came to $34.6 Billion in 2004 (http://www.kff.org/uninsured/upload/the-cost-of-care-for-the-uninsured-what-do-we-spend-who-pays-and-what-would-full-coverage-add-to-medical-spending.pdf). Inflating these costs from 2004 through 2008 at 7.1% (actual recorded annual rate increases of health care costs for that period) and totalling the years 2012-2019 you get: $456 Billion. 70% of that figure gets you: $319 Billion. This is the expected cost reductions to governments (over the period 2012 - 2019) due to fewer uninsured people coming into Hospital emergency rooms for medical care.

so we have:

Increased revenue to Government (less 'penalty' payments): $429 Billion (WaPo).

Decreased cost to Government due to fewer unpaid visits to emergency rooms: - $319 Billion

Net affect to government revenues/taxes over the period (2012-2019): $110 Billion

Decreased insurance costs (premiums) to those who have private insurance: $299 Billion

Total impact on those who have private insurance coverage: -$37 Billion (a reduction of insurance costs plus taxes due to ACA)

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[Igel]

1. Dangerous kind of analysis.

First, you've expanded "tax" to include a lot of things that don't directly involve government.

By that standard, all the people who now pay nothing but who, when faced with the "tax" decide to buy insurance, are paying "tax" when they pay their insurance premiums. Just one for instance. There are dozens more.

Second, you're tying yourself to a set of self-serving estimates. Congress stipulated the acts into fiscal compliance with their projections. That makes their projections and estimates more a political document than a public health or economic one. Essentially they ordered the CBO to make certain assumptions: Medical expenses will be decreased because of these innovations and savings, this many fewer people will go to the ER and instead seek preventative care for a savings of so many dollars. The estimates at the time were a subject of argumentation, and not just (R) vs (D). Some blatantly ignored the data from Massachussetts, which had made the same kinds of assumptions and found them incorrect. Things like "ER use will go down dramatically when regular doctor visits and preventive care are furnished" when, in fact, it's more true that "ER use is little affected even when there's the possibility of regular doctor office visits and preventive care". Making life worse was a shortage of available doctor's appointments, so those who would have wanted an emergency doctor's office appt. wound up having no choice but the ER.

Advocates make bad analysts.

[rocktivity]

2. Obamacare Is a Tax Cut for Middle-Class Families

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