Samuelson: Obamacare a 'Colossal Error of Judgment'

Monday, 18 Jun 2012 09:24 PM

By Bob Willis

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President Barack Obama’s focus on reforming health care as a centerpiece of his first term amounted to a "colossal error of judgment" that weakens the economic recovery and angers millions of Americans, economist-author Robert Samuelson writes in the Washington Post.

The Supreme Court may rule as early as this week on the Patient Protection and Affordable Care Act (PPACA), informally referred to as Obamacare. Both Republican opponents and Democratic supporters of the law are girding for a struggle in Congress and a backlash across the country.

Obamacare raises uncertainty and decreases confidence just when a recovery from the Great Recession requires more confidence and less uncertainty, says Samuelson.

Special: Should Obama's Health Plan Be Overturned? Vote Here Now!

Due to the complexity of the law, people don’t know where they will get insurance or how much it will cost, while 30 percent of employers surveyed say they might drop insurance coverage and pay fines.

The law raises the cost of hiring and thus discourages job creation by requiring employers to buy health insurance for some workers. Because the employer mandate exempts firms with fewer than 50 workers, that’s an incentive for firms not to grow, Samuelson writes, citing economist Diana Furchtgott-Roth of the Manhattan Institute.

Instead of reining in health-care costs, Obamacare will exacerbate them, he writes. Because insured people use more health-care services than the uninsured, the law raises overall spending. The government’s own actuaries forecast health care as a percent of GDP to rise to 19.6 percent in 2021, from 17.9 percent in 2010.

Obamacare will likely worsen the federal deficit. Health care, driven by Medicare and Medicaid costs, exceeds one fourth of the budget. Obama’s plan will raise federal spending by $1.76 trillion by 2022, according to the Congressional Budget Office. That gain may be offset by tax increases and assumed cuts in Medicare, but the cuts may be repealed or reduced, he writes.

The plan also favors the old and discriminates against the young by forcing some young Americans to buy insurance at artificially high premiums, says Samuelson.

Special: Should Obama's Health Plan Be Overturned? Vote Here Now!

Robert Reich, a former secretary of labor in the Clinton administration and a professor of public policy at the University of California at Berkeley, writes in the New York Times that a possible Supreme Court decision to overturn the controversial individual mandate may lead to a "political bargain" over a revised plan.

If the individual mandate, which forces most Americans to choose insurance or face fines and is one of the least popular elements of the plan, is struck down by the court, insurance-company lobbyists would press to amend the law to remove the requirement they cover pre-existing conditions, one of the most popular elements of the plan. That might open the path to a compromise by allowing all Americans to pick the so-called "public option," a Medicare option or something like it, he writes.

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