Health Care: The Revealing Details, the Revealing Reaction

By April 7, 2010Health Care, Taxation

At least tanning parlor operators who followed the health care debate knew they were going get hit with a 10 percent services tax. But the ski resort operators…

David Freddoso, Washington Examiner, “Five things we learned about Obamacare after it passed“:

Five: The ski-tourism industry suddenly realizes that it is endangered by Obamacare. Ski resorts must now provide health care or else pay a fine for each employee who works more than 120 days out of the year — and many of their employees do.

The bill had applied only at the 150-day threshold, until House Democrats changed it in reconciliation. They also cranked up the fine from $750 to $2,000 per employee, in order to pad their budget numbers.

Shoddy, shadowy revenue grabs. They should have just taxed ski resort operators 10 percent. The nexus to health care financing is just as direct as is the connection to tanning services.

The first, big “surprise” to follow enactment of the health care laws was the accounting charges taken by companies that will lose their tax deductions for providing Medicare Part D prescription drug coverage to their retirees. The legally mandated declarations irritated the Obama Administration, which initially claimed the companies were exaggerating the effects for political purposes. James Klein, president of the American Benefits Council, demolished that argument in a Wall Street Journal op-ed Tuesday, “The White House and the Writedowns.” Klein also points out what could probably serve as No. 6 on the list of things we’ve learned about the health care legislation after their passage.

The real story here—and the one that is getting little attention—is that the new law will likely result in a change of drug coverage for 1.5 million to two million retirees as they are moved from their employer-sponsored plans, according to a study we commissioned by former Office of Management and Budget official Don Moran. Reasonable people can differ as to whether shifting retirees to the Medicare drug program is good or bad policy. But two things are certain. First, it will cost the federal government more money. Second, employers will be excoriated when it happens.

When an administration is unwilling to accept criticism of two sentences in a 2,700-page law there is a problem. The White House needs to stop being so defensive. Here’s a new talking point for Press Secretary Robert Gibbs to try: “Overall, we are very proud of the sweeping legislation we have enacted. But we acknowledge that the drug-subsidy provision is having unintended, negative consequences for companies, and potentially also for retirees and government costs.”

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