In its latest monthly report on economic conditions across the country, the Federal Reserve points to Obamacare as one reason the unemployment rate has remained near or above 8 percent under the current administration.
That’s what Sally Pipes, president of the Pacific Research Institute, writes in an op-ed piece for Forbes magazine
The Fed’s so-called “beige book” noted that employers across the country have “cited the unknown effects of the Affordable Care Act as reasons for planned layoffs and reluctance to hire more staff,” Pipes says, adding that as more businesses learn about Obamacare, “the more they’re coming to realize that affordable care” is the last thing it will provide.
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Pipes points out that next year when Obamacare goes into full effect, insurance companies will have to pay $8 billion in so-called premium taxes to the federal treasury, a figure that rises to $11.3 billion in 2015 and 2016, then $13.9 billion in 2017, and $14.3 billion after that. The cost, she writes, will be passed on to consumers in the form of higher premiums for private coverage.
Pipes cites an estimate by former CBO director Douglas Holtz-Eakin that the premium tax will add 3 percent to the cost of family coverage over the next decade. She also notes a study by the consulting firm Oliver Wyman that the tax will boost premiums by as much as 3.7 percent 10 years from now.
That translates into an additional $5,000 in premiums for a family and nearly $7,000 for small businesses, although those figures could be higher in states like West Virginia and Nebraska, she says.
Pipes also asserts that taxes will also rise for seniors on private Medicare Advantage plans and on state governments bearing the costs of the Medicaid managed care plans.
In addition, she says, the premium tax could give an unfair advantage to nonprofit insurers, which don’t pay income taxes, over for-profit companies such as WellPoint, United Healthcare, and Aetna.
Pipes supports calls by several groups representing small businesses for a repeal of the tax, as well as legislation introduced in the House earlier this year by Louisiana GOP Rep. Charles Boustany and Utah Democratic Rep. Jim Matheson, D-Utah, would repeal it before it takes effect.
“That’s the right call,” she says, arguing that repealing the tax would “put money back in the pockets of American business — money they could use to keep the nations’ unemployment rate a whole lot lower than the 8 percent of the last four years.”
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