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Camp: Health Law Will Hurt Consumers, Business

May 27, 2010 — Op-eds and Speeches   

The Democratic agenda has been made clear: Tax Americans more so government can spend more. It started with a trillion-dollar stimulus bill that has failed to hold unemployment in check. Then it was a trillion-dollar health care bill that, according to the Congressional Budget Office, will increase health insurance premiums for millions of Americans.

Adding insult to injury, the health care law increased taxes by more than $500 billion, with much of that burden falling on the middle-class families that President Barack Obama promised to protect, and cuts Medicare by more than $500 billion, which Medicare actuaries warn could jeopardize seniors’ access to care.

With all this taxing and spending, no wonder a recent polling memo from the liberal Herndon Alliance warned Democrats: “Do not pro-actively argue that reform will reduce the deficit, create jobs, or strengthen Medicare. … Those claims do not pass the believability threshold with voters.”

Workers and employers are right to be leery of this new law. Already, some of America’s biggest employers have reported that the tax increases in the Democrats’ health care bill will reduce their earnings by more than $4 billion and threatens their ability to hire new workers, retain existing ones and maintain health care benefits.

Meanwhile, the nation’s leading small-business organization, the National Federation of Independent Business, has joined state attorneys general in a lawsuit seeking to overturn the new law. Clearly, NFIB and small-business owners across the country understand there is little but more costs, more paperwork and more mandates for them in this health care law.

For example, the so-called small-business tax credits in the law will be of little use to employers and employees. Employers with more than 50 workers — those who are mandated by the law to provide government-approved health insurance to their employees or pay a new tax — cannot even get the credit. The CBO noted only 12 percent of those who receive their health care from a small business do so from a business that will be eligible for the tax credit. Worse yet, employers could be encouraged to fire employees or reduce wages just to qualify for the credit. Under the law, employers must have 50 or fewer employees to receive the credit, and it begins to phase out at more than 10 employees and when the average salary exceeds $25,000. Small businesses are prohibited from receiving the credit if the average employee’s salary exceeds $50,000.

The Democrats’ equally misguided play-or-pay insurance mandate also discourages hiring. Starting in 2014, if an employer breaks the 50-employee threshold and does not provide government-approved insurance, then the business must pay a substantial tax penalty. Thus, the cost of the 51st worker is his or her salary plus at least $42,000 in new taxes.

Furthermore, the Democrats’ health care overhaul created a new Medicare tax that will hit many small-business owners, because the majority of small businesses pay taxes at the individual level. According to the NFIB, “The businesses most likely to see the tax increase are those that employ between 20 to 200 workers. These businesses account for more than one-quarter of the American workforce.”

If it is bad for small business, it is bad for America, and this health care law is both. We need to repeal this law and replace it with common-sense reforms that will actually lower health care premiums, and according to the CBO, that is exactly what the House Republican bill did.

The Republican alternative reduced premiums across the board by up to 10 percent or $1,050 per family. At the same time, we expanded access to health insurance for everyone, including those with pre-existing conditions, prevented health insurers from unjustly canceling a policy because of an illness and enabled dependents to remain on their parents’ health policies until they are 25.

How did we do it? By giving Americans the ability to shop across state lines for the plan that best meets their needs and at a price they could afford, by eliminating the unnecessary and costly testing doctors and hospitals order out of fear of being sued, and by providing states with the incentives to reduce health care premiums while decreasing the number of uninsured Americans.

Health care provides the best example of the differences between our two parties. Republicans would drive down the cost of health care by empowering patients and doctors to make health care choices. By contrast, Democrats enacted a massive new law that will increase the cost of health care and puts the Internal Revenue Service and Health and Human Services Department in greater control of personal health care decisions.

Americans are loudly asking us to repeal and replace this law with something better, and we should do just that.

Rep. Dave Camp (R-Mich.) is the ranking member on the Ways and Means Committee.

SUBCOMMITTEE: Health