Heritage President Ed Feulner Responds to President Obama’s Claims

President Obama this morning cited The Heritage Foundation’s research in an attempt to sell his health care package as a “middle of the road, centrist approach.” We take great exception to this misuse of our work and abuse of our name. This is but the latest act in a campaign to sell this big-government program as a moderate law that incorporates conservative ideas. Americans should not be fooled.

Let’s be very clear: We oppose this new law because it is a radical new intrusion into the daily lives of all Americans and a massive takeover of one-sixth of the U.S. economy. We view the President’s health care law as inimical to our national interests and offensive to the historic American dedication to the principle of self-government.

Our research has shown that President Obama’s health approach is financially unsustainable and will ultimately lead to health care rationing, a lower quality of care and a greater degree of dependence on government. We deplore those outcomes and are committed to making the intellectual case for this law’s repeal.
What part of that does President Obama not understand?

Specifically, President Obama told NBC’s Today Show host Matt Lauer that a centerpiece of his health care package, “in terms of the exchange, just being able to pool and improve the purchasing power of individuals in the insurance market—that originated from The Heritage Foundation.”

But the President knows full well—or he ought to learn before he speaks—that the exchanges we and most others support are very different from those in his package. True exchanges are simply a market mechanism to enable families to choose their health insurance. President Obama’s exchanges, by contrast, are a vehicle to introduce sweeping regulation and federal standardization on health insurance.

Moreover, we completely disagree that President Obama’s law improves the purchasing power of individuals in the insurance market. On the contrary, it will create a staggeringly complex and costly insurance system that will drive up premiums for Americans.

The President’s health care law is only eight days old, and already it has cost our economy billions of dollars. Late last week, AT&T alone took a $1 billion charge because of the impact of the bill, and the consulting firm Towers Watson told the Wall Street Journal that the total hit this year will reach nearly $14 billion. It is sad, given the present state of our economy, that the President’s party in Congress has reacted not by trying to find ways to spare the jobs that will be lost because of this law. Instead, they are trying to intimidate companies that take such charges with threats that they will be hauled in before the Energy and Commerce Committee.

It is also revealing that President Obama is still struggling to sell the American people on a bill that he and his party rammed through passage by a narrow margin in the face of bipartisan opposition. It is a sign of desperation that he, his handlers and the media echo chamber are reverting to the campaign practice of selling the President and his policies as centrist, middle of the road and aisle-crossing. As the country has found out the hard way in the past 15 months, they are none of those things.

The President has made a habit of using conservative talking points when trying to sell a liberal ideology because he knows that this is a center-right country that rejects his agenda when articulated honestly. His supporters have even tried to pin the blame of the potentially unconstitutional individual mandate on us. This approach brushes over the details of our research and ignores our ability to evolve past further developed research.

Over 16,000 new IRS agents will be hired by the government to enforce the President’s mandate on the American people. The President’s health care plan also raises premiums, taxes, and costs while lowering quality, and expanding Medicaid. These are not conservative ideas.

And let’s be clear, these are not ideas Heritage has ever, or would ever, support.

We made every effort over the past year to share our ideas for better health care reform with the President and members of both parties in Congress, but were not invited behind the closed doors. Now, after the bill is signed, it seems the President wishes we were along for the ride. We were not. We remain fervently opposed to the President’s partisan plan, and urge its immediate repeal. This is not common politics, it’s common sense.

Had President Obama limited his bill to centrist elements, he would have won wide bipartisan support for effective reform both within Congress and among the American people. He would have won it, too, at a fraction of the cost of this intolerable, huge and intrusive legislation. He would not now be facing popular rejection by the American people. And he would not need to misrepresent Heritage policies and positions in an attempt to give his radical health plan the patina of respectability.

You haven’t yet, because many of the laws rules haven’t gone into effect yet.

Health care reform timeline: Immediate change, long-term steps

Parts of the plan won’t be fully phased in for a decade, but ultimately 94 percent of eligible Americans would have coverage. (Which btw, doesn’t guarantee quality medical care!)

Here’s a timeline of some changes.

This year

• Sets up a high-risk health insurance pool to provide affordable coverage for uninsured people with medical problems.

• Starting six months after enactment, requires all health insurance plans to maintain dependent coverage for children until they turn 26.

• For children with medical problems, prohibits insurers from writing a policy that excludes payment for the particular condition. Insurers in the individual market could still deny new coverage to children in poor health.

• Bars insurance companies from putting lifetime dollar limits on coverage, and canceling policies except for fraud.

• Provides tax credits to help small businesses with up to 25 employees get and keep coverage for their employees.

• Begins narrowing the Medicare prescription coverage gap by providing a $250 rebate to seniors in the gap, which starts this year once they have spent $2,830. It would be fully closed by 2020.

• Reduces projected Medicare payments to hospitals, home health agencies, nursing homes, hospices and other providers.

• Imposes 10 percent sales tax on indoor tanning.

2011

• Creates a voluntary long-term care insurance program to provide a modest cash benefit helping disabled people stay in their homes, or cover nursing home costs. Benefits can begin five years after people start paying a fee for the coverage.

• Provides Medicare recipients in the prescription coverage gap with a 50 percent discount on brand name drugs; begins phasing in additional drug discounts to close the gap by 2020.

• Provides 10 percent Medicare bonus to primary care doctors and general surgeons practicing in underserved areas, such as inner cities and rural communities; improves preventive coverage.

• Freezes payments to Medicare Advantage plans, the first step in reducing payments to the private insurers who serve about one-fourth of seniors. The reductions would be phased in over three to seven years. (2018)

• Boosts (through tax increases) funding for community health centers, which provide existing basic care for many low-income and uninsured people.

• Requires employers to report the value of health care benefits on employees’ W-2 tax statements. First time in history a tax will be added for medical insurance, increasing the taxable income level/payment for all Americans including those under $250,000.00

• Imposes $2.3 billion annual fee on drug makers, increasing over time. Increasing the cost of medication, to all Americans. This is NOT Bushes fault.

2012

• Sets up program (and increase taxes) to create nonprofit insurance co-ops that would compete with commercial insurers.

• Initiates Medicare payment reforms by encouraging hospitals and doctors to band together in quality-driven “accountable care organizations” along the lines of the Mayo Clinic. Sets up a pilot program to test more efficient ways of paying hospitals, doctors, nursing homes and other providers who care for Medicare patients from admission through discharge. Successful experiments would be widely adopted.

• Penalizes hospitals with high rates of preventable re-admissions by reducing Medicare payments. Causing the closer of hospitals, creating more “Walter reed army medical centers”.

2013

• Standardizes insurance company paperwork, first in a series of steps to reduce administrative costs.

• Limits medical expense contributions to tax-sheltered flexible spending accounts (FSAs) to $2,500 a year, indexed for inflation. Raises threshold for claiming itemized tax deduction for medical expenses from 7.5 percent of income to 10 percent. People over 65 can still deduct medical expenses above 7.5 percent of income through 2016. 2017 people over 65 itemized tax deduction for medical expenses will increase to 10 percent.

• Increases Medicare payroll tax on couples making more than $250,000 and individuals making more than $200,000. The tax rate on wages above those thresholds would rise to 2.35 percent from the current 1.45 percent. Also adds a new tax of 3.8 percent on income from investments, for all.

• Imposes a 2.3 percent sales tax on medical devices. Eyeglasses, contact lenses, hearing aids and many everyday items bought at the drug store are exempt.

2014

• Prohibits insurers from denying coverage to people with medical problems, or refusing to renew their policy. Health plans cannot limit coverage based on pre-existing conditions, or charge higher rates to those in poor health. Premiums can only vary by age (no more than 3-to-1), place of residence, family size and tobacco use.

• Coverage expansion goes into high gear as states create new health insurance exchanges — supermarkets for individuals and small businesses to buy coverage. People who already have employer coverage won’t see any changes. Until there employer coverage is discontinued

• Provides income-based tax credits for most consumers in the exchanges, substantially reducing costs for many. Sliding scale credits phase out completely for households above four times the federal poverty level, about $88,000 for a family of four. Creating a European style socialized medical care

• Medicaid expanded to cover low-income people up to 133 percent of the federal poverty line, about $29,300 for a family of four. Low-income childless adults covered for the first time, at a different rate.

• Requires citizens and legal residents to have health insurance, except in cases of financial hardship, or pay a fine to the IRS. Penalty starts at $95 per person in 2014, rising to $695 in 2016. Family penalty capped at $2,250. Penalties indexed for inflation after 2016.

• Penalizes employers with more than 50 workers if any of their workers get coverage through the exchange and receive a tax credit. The penalty is $2,000 times the total number of workers employed at the company. However, employers get to deduct the first 30 workers.

2018

• Imposes a tax on employer-sponsored health insurance worth more than $10,200 for individual coverage, $27,500 for a family plan. The tax is 40 percent of the value of the plan above the thresholds, indexed for inflation.

2020

• Doughnut hole coverage gap in Medicare prescription benefit is phased out. Seniors continue to pay the standard 25 percent of their drug costs until they reach the threshold for Medicare catastrophic coverage of $4550, when their copayments drop to 5 percent.

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