Change We Can’t Afford

Member Group : Commonwealth Foundation

This week, the Patient Protection and Affordable Care Act celebrated its two-year anniversary before the U.S. Supreme Court. The controversial health care law finds itself in front of the highest court in the land after Pennsylvania and 25 other states joined together to challenge its constitutionality.

After ferocious public debate and two years of implementation, the legislation still faces an uncertain fate – and the Obama administration still finds itself working to convince a majority of Americans that its signature health care reform isn’t a bad thing. Current Gallup polling shows about three-fourths of Americans believe the law is unconstitutional.

According to the White House, individual liberty matters less than the law’s big benefits, which are supposedly just around the bend. The view from the states, however, is decidedly less optimistic. The problems with the law are so severe its harmful effects must be enumerated.

The act imposes new burdens on Pennsylvania in three dangerous and damaging ways. First, it costs our businesses with new taxes. Second, it costs our residents with higher premiums. Third, it costs our states, threatening to reduce the quality of care for Medicaid recipients on the losing end of strained budgets. Tallying these cumulative economic burdens explains and justifies today’s stubborn public opposition. Far from controlling costs, the law controls lives – even to the point of worsening them.

Consider the costs to businesses, which are already holding down employment in anticipation of new legislation. The Joint Committee on Taxation finds that the law will be responsible for a total of $400 billion in new taxes and fees in the next seven years. Even the Obama administration’s own Department of Health and Human Services (via the Centers for Medicare and Medicaid Services) admits the law will push health care expenditures higher. Though the Obama administration continues to deny it, the calculus is simple: more health care spending equals more expenses on already-strapped businesses.

What about the impact on our fellow citizens? The law has raised, not lowered, premiums. Consulting firm Aon Hewitt estimates that premiums in the individual market are some 5 percent higher this year because of the health care law.
More is to come. In Wisconsin, a study by Gorman Actuarial and MIT’s Jonathan Gruber – an adviser to the president on the Patient Protection and Affordable Care Act – sees an average premium increase of 30 percent. And last week, Pennsylvania Secretary of Public Welfare, Gary Alexander, noted one in four Pennsylvanians will be on Medicaid when the Patient Protection and Affordable Care Act is in full effect.

Finally, the law wreaks havoc on state budgets. In Pennsylvania, Medical Assistance spending has consistently grown faster than taxpayers’ ability to pay. Medicaid now accounts for 31 percent of our $64 billion operating budget – consuming a larger share of any state’s budget except New York. And under the Patient Affordable Health Care Act, costs will continue to skyrocket as Medicaid enrollment is estimated to increase 17.6 percent in 2014. This is simply unsustainable.

While the U.S. Supreme Court will also focus on the key issue of whether the law’s individual mandate is constitutional, the law’s devastating economic consequences cannot be ignored. Its intended reforms will ultimately raise taxes, increase premiums and balloon budgets while businesses, individuals and states struggle to gain the upper hand on their finances.

Whether the Supreme Court finds it constitutional or not, this is one law America can’t afford.

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Matthew J. Brouillette is the president and CEO of the Commonwealth Foundation (, Pennsylvania’s free-market think tank.