President Barack Obama signed his new health care reform bill into law Tuesday after it received approval from the Senate in December and the House of Representatives on Sunday.
The national health care policy plans to extend coverage to 32 million Americans that are currently without health insurance by offering government subsidies to some citizens and businesses.
This legislation allows the federal government to exert undue influence on our market system by imposing new taxes, making health care coverage mandatory and creating large state liabilities in the long run.
Private insurance companies and Americans earning higher income will be required to pay new taxes to help fund Obama’s health care plan. The majority of those reaping the benefits will be lower income families.
For example, individuals with a salary of $200,000 or more will have to pay a 3.8 percent tax on investment income. Those with salaries from $500,000 to $1 million will pay $1,500 and $9,000, respectively, on top of regular income taxes.
Insurance companies that provide expensive plans will be required to pay a 40 percent excise tax on each high-end policy.
Taxpayers will have to bear a burden to fund a government health care program that will cost nearly $1 trillion to implement.
Substantial cutbacks in Medicare spending and new taxes may be enough to compensate for the costs of health care reform. But if savings on Medicare aren’t high enough, then taxes for higher-income families will be even more, the New York Times reports.
Well-off citizens and certain businesses are penalized with additional taxes to help pay for health care because they make more money. It’s unfair they have to pay for their own health coverage and finance another.
This new system mandates most Americans to a health insurance plan and requires employers with 50 employees or more to provide health insurance.
If Americans do not comply, they will be fined $695 per year. Businesses will be fined $2,000 annually for each worker they do not cover.
A legal requirement to provide health insurance lowers the demand for workers because of an increase in cost for hiring more employees. This may lead to a decrease in job availability, which would hurt the unemployed and the economy.
The Congressional Budget Office estimated that the new health care system could reduce the national deficit by about $140 billion in the first 10 years.
However, with the expansion of federal medical aid programs and health insurance subsidies to lower income Americans, the amount of national debt may grow despite taxes and Medicare cuts.
The cost of this reform is too great to balance on a regular basis, especially in this time of economic crisis.
Americans pride themselves on an efficient market system that allows them to make their own economic decisions as entrepreneurs and consumers without government interference.
Yet, this bill gives the government too much power.
If insurance companies and health care providers are committing civil injustice by charging rates deemed too high, then that can be addressed without heavy government involvement and sweeping health care changes across the board.
Margarita Abramova is a freshman majoring in mass communications.