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Mr. FLEMING. Mr. Speaker, in this hour, I and my colleagues who will be joining me very shortly--other physicians who are from the GOP Doctors Caucus, perhaps nurses, and other health care workers as well--in this next hour we're going to be talking about our favorite subject, and that is health care reform. We're going to be talking about specific aspects, things that have actually come to light to us that I think are important. We're going to have other things that in the coming days we're going to learn about how ObamaCare was passed, what things were done by the other side of the aisle to make that happen, things that maybe some would call sausage-making, others would say it's improper. But we'll certainly spend some time on that as the days come.
I want to continue a theme that we've been discussing, and that is the broken promises of ObamaCare. Remember, to get ObamaCare passed, President Obama made a number of promises.
I'll start with the first one that is relevant to our topic tonight, and that is: Under my plan, no family making less than $250,000 a year will see any form of tax increase. That was candidate Obama, Senator Obama at the time, who talked about all the number of things that were going to be good about ObamaCare; but in fact we see that virtually everything that's come up, with a few possible exceptions, has not been so favorable.
I think that taxes is really a very relevant subject to speak about this evening because here we are and today is the tax deadline for the IRS, and we all have that on our minds. It's interesting, whenever I file my taxes, the first thing I think about doing is projecting into the next year what the issues are going to be for me and my taxes. And so I think it's only proper and the timing is excellent that we talk about that this evening.
Remember, Candidate Obama pledged he would not raise any of your taxes and promised not to tax health benefits. His health care broke those promises at least 10 times. Here's just a lineup of some of the taxes that we're talking about.
Fifty-two billion dollars in fines on employers who do not provide government-approved coverage. Remember that under ObamaCare not only is there a mandate date for individuals to buy health insurance. There's a mandate on the employers, the business owners to buy it as well. And upon both is the burden to buy not health insurance but government-conceived health insurance, that is, health insurance that the government in its wisdom--our Federal Government--decides and deems is proper for us. And so you have to make two fulfillments in that mandate. One is to buy health care insurance and, number two, health care insurance that's approved by the government.
Thirty-two billion dollars in taxes on health insurance plans. The actual health plans are going to be taxed as well. Now, who is going to pay that tax? Do you think the insurance companies are going to pay it? No, it's going to be passed down to you, the subscriber, as taxes on business always make their way down to the consumer.
Five billion dollars in taxes from limits on over-the-counter medication; $15 billion in taxes from limiting the deduction on itemized medical expenses; $13 billion in taxes from new limits on flexible-spending arrangements; $60 billion in taxes on health insurance plans; $27 billion in taxes on pharmaceutical companies; $20 billion in taxes on medical device companies; $3 billion in taxes on tanning services; $3 billion in taxes on self-insured health plans; and $1 billion in new penalties on health savings account distributions. The health care law also includes a high income tax. Because it's not indexed for inflation, it will eventually hit 80 percent of taxpayers.
I draw my colleagues' attention to this slide: ``ObamaCare's Rising Tax Burden.'' You can see that the tax burden in 2012, the year we're in, is $190 for a family of four. That's $15 billion. You see that the burden goes up each year, and that in the out-years, 2022, it makes it above $150 billion. In 2032, the burden goes well above $250 billion. And it finally tops out at $320 billion total, and that's an average of $3,290 for a family of four.
So what am I saying? Remember that when you hear the rhetoric from the other side of the aisle, it talks about how we should be having more sacrifice from the wealthy and more sacrifice from those who make more. Folks, we've been down this road before.
Remember the luxury tax that came out some years ago? What did it do? It killed the companies that made boats and luxury items. It created a lot of job losses. The people who were hurt were the working class people, not the wealthy. They can still buy those things anyplace they want to.
We also came up with this silly idea of an alternative minimum tax to make the wealthy do their fair share.
Well, we have the AMT today, and where has it gotten us? Because that was never indexed for inflation, middle class people are being hit by the alternative minimum tax. So it's no longer a tax on wealthy. It is a tax on the middle class, the people that our colleagues on the other side of the aisle talk so fondly of.
That's an important point, and that is that every time we come up with a tax on the wealthy, it always makes its way to the working class and the middle class.
Now, why is this? Is this by accident or is it by grand design? Well, folks, we all know that inflation occurs every year at an average rate of about 3 percent, but it's been as high as 16 percent in our history. And so any time we have a tax law that affects people in a certain income, we know that automatically, over time, people with lower and lower incomes, because while their absolute dollars in value are going to go up, the truth is, the purchase power of those dollars goes down. So that pushes more and more people of lower and lower income levels into higher and higher tax brackets.
So, again, our colleagues on the other side of the aisle love all of these taxes on the wealthy, but they can never make enough money. We've heard in recent days about the infamous Buffett tax, the Buffett rule that would require superwealthy people to pay some additional tax. And their own side agrees that would only add about $4 billion per year, not even a drop in the bucket, less than 1 percent of the annual deficit.
So why is that important? It's important because if you're going to get more income from taxes--and I would argue that you never really get more income from taxes, but if you think you can, you can only do it when you spread it out among the middle class and the working class. And the way you do that, kind of the silent way, the camel nose under the tent, is to pass it on the wealthy first, and then, through inflation, it's passed down to albeit a lower income level but a much larger group, because you simply can't get enough tax revenue by putting a lot of tax on the wealthy. There just isn't enough wealthy people out there to do it. The way you have to do it is push it down where there's a lot of people, and that's the middle class and the working class.
Another slide here, rhetoric versus reality on premium cost, the average annual cost of family health insurance premiums in the U.S.
Here we are 2012. This is what President Obama in campaigning for ObamaCare said would happen, that you would follow this blue line down, and the costs would go down by 2,500. And what are we hearing from all the actuaries, the CBOs and others? Not only will it go up by $393, but we already have a differential of around $4,000 from where President Obama said we would be today and where we actually are. It hasn't gone down; it's actually gone up.
Let's talk about a couple more taxes, and then I'm going to introduce a colleague here and give him some sharing time as well.
The surtax on investment income, $123 billion, which begins this past January, the creation of a new 3.8 percent surtax on investment income earned in households making at least $250,000 for a couple or $200,000 single. Now this is the homeowner real estate tax that you've heard about. It was, again, passed in the dead of night. Folks, this is a terrible tax, 3.8 percent on investment income.
Now, when you sell your home, it may or may not be classed as investment income, but it can be, it just depends on the situation. But it's not just that. If you own any type of other property, if you own stocks and bonds, mutual funds, whatever, they could be easily subject to this, and it is not indexed to inflation.
Again, let me reemphasize this. Yes, it's a tax on people who make over $200,000 a year, but if you make $50,000 a year, over time, this will affect you, too, because inflation will bring those dollars up in real terms because of inflation, and your buying power will stay at the $50,000 level, but you will show on paper that you're making $200,000, and this tax will affect you.
So the bottom line here is that ObamaCare has many taxes, and certainly they are Trojan horses by any explanation; and, yes, they don't raise a lot of revenue at first, but down the road they raise a lot of revenue, but not on the wealthy folks, on the middle class. That's who's getting hurt by ObamaCare.
A medicine cabinet tax, $5 billion beginning this past January, Americans are no longer able to use their health savings accounts and flexible spending accounts and all those other types of accounts on over-the-counter drugs. So that means if you want to use your health savings account to pay for your cold medicine or medicine you're taking for a headache like Aleve or Motrin or something like that, if you want to pay for it through your health savings account, you're going to have to go get a prescription from your doctor. And the doctor is going to say, Look, I'm overwhelmed with all these people wanting me to do this. We're going to have to charge something for that, so that means more cost. Ultimately, more bureaucracy, more paperwork, more cost, and up until now, prior to ObamaCare, that was not the case. You could write that off or pay for that out of your health savings account.
An HSA withdrawal tax hike, $1.4 billion, that began in January 2011. It increases additional tax on nonmedical early withdrawals from an HSA from 10 to
20 percent, disadvantaging them relative to IRAs and other tax advantage accounts. So, you see, if you have an early withdrawal from your IRA or some other type of retirement plan, you've had a 10 percent penalty, and that was true of HSAs. So that's been doubled. So ObamaCare has limited the use of health savings accounts, but at the same time has made the penalties even steeper for using it.
And I can tell you, in my own case, in my own companies, apart from my own medical practice, we have used health savings accounts to tremendous benefit to our employees because it has lowered their cost and taken a lot of the anxiety and the fear away from their cost in being caught in some sort of illness that would bankrupt them otherwise.
An excise tax on charitable hospitals, that's immediate, $50,000 per hospital if they fail to meet new community health assessment needs. Section 1411 increases the Medicare hospital insurance portion of the payroll tax, so this provision will increase the employees' portion from 1.45 percent to 2.35 percent for families making more than $250,000 a year or individuals making above 200. Combined with the employers' portion, the total rate will increase by 3.8 percent on every dollar of income over $250,000.
And, again, I implore you, I realize, hey, I don't make $250,000, I don't make $200,000, but because of inflation--and trust me, with the monetary easing and the monetary policies that are coming out of this administration in half of the last 3 1/2 years--when inflation gets going again, which it will quite soon, you will be driven up into those income levels, but your buying power will be the same as it is today. So, trust me, you're not getting by with anything. You're going to get hit with this tax just like everybody else.
The reality is--and I'm going to be recognizing my good friend, Dr. Gingrey, here in a moment. The reality is ObamaCare includes tons of new taxes and tax hikes. Heritage has a list of them that shows an increase in revenue of more than $500 billion in 10 years. Two examples that clearly hit consumers are the 10 percent tax on indoor tanning services that will raise $2.7 billion between 2010 and 2019 and, beginning in 2013, the 2.3 percent excise tax on manufacturers and importers of certain medical devices that will raise $20 billion between 2010 and 2019.
And I'm just going to just throw in a couple of more things.
Remember, this discussion began with this being the April 15--April 17 deadline for your taxes and the Internal Revenue Service.
Remember that under ObamaCare as many as 16,000 new IRS agents will be hired. Estimates vary, of course, and that many have not been hired yet. But there's no question about it that the IRS will be beefed up to the tune of billions of dollars in order to make that happen.
So, with that, I've been joined by my colleague, my good friend, Dr. Phil Gingrey, an obstetrician/gynecologist from Georgia, someone that I look up to very much, who's been a great mentor to me and a role model; who was here as a physician in days past when there weren't many doctors in the House of Representatives, and has helped facilitate, in fact helped start, the GOP Doctors Caucus, which is speaking here tonight, and helped grow our numbers from just a handful of physicians and health care workers to now over 15 MDs and upwards of around 20 total health care workers that we have in the House of Representatives that I think are making big, big differences in particularly health care policy overall.
I yield to the gentleman, Dr. Gingrey.
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Mr. FLEMING. Well, I thank my friend and colleague. I'll certainly be returning back to you for some more information that's very valuable information.
I want to get back to and sort of recap some of the things I talked about, and that is that the taxes are tremendously increased under ObamaCare. Well, let's talk about the financing of ObamaCare. I'm just going to stick with the basics. There are a lot of ways it is theoretically financed, but I'm going to tell you maybe the three major ways that it's supposedly paid for.
Well, number one, you heard my friend, Dr. Gingrey, say that ObamaCare actually takes over $500 billion--that is, over a half-trillion dollars--from existing Medicare and uses that to subsidize the middle class health plans for people below a certain income level. We're going to get to that in just a moment--I'm going to draw your attention to this chart and talk about those subsidies. But not only does it do that, but as my good friend says, it's used to extend the life of Medicare.
So this is basically how it works. The idea of the bill is it takes money out of Medicare and theoretically makes Medicare last longer--because it's running out of money--by taking the same money out of the middle and putting it at the end. I don't understand how that can work, but that's the way it works. That would be sort of like taking money out of your paycheck in the middle of the year and somehow living on nothing for about 3 months, and then going back to what you took out and paying at the end. It makes no sense.
Not only that, but it takes the same $500 billion--and we've really honed down on this in our committees, and Secretary Sebelius had to admit that this was true--it takes the same $500 billion that's used to prolong the life of Medicare to subsidize middle class health plans. I don't know--where I come from in Louisiana, we can't spend the same dollar twice. You can spend it place A and place B. If my kids want to go to the movies or they want to do some entertainment, or maybe they need money for their education, I can give it to them, and they can spend it one time. They don't get to use the same dollar twice. And folks, neither can your Federal Government. So that is really smoke-and-mirrors accounting. We've called them out on it, and they've really basically admitted that's true.
But then another way that ObamaCare is paid for is by over $800 billion in taxes in 10 years, which I've gone over a number of these, and I'm going to get back to them. It really is not paid for. And we know, we're getting estimates now showing that as much as 300 to $500 billion is going to be added over the next 10 years in deficits, total debt in that period of time. So it is not paid for. All of these steep taxes, all of these smoke-and-mirror types of accounting are not going to work.
Furthermore, half of the people who are going to get health care coverage cards that they wouldn't otherwise get are going to be on Medicaid. Today, Medicaid pays on average about 60 percent of what Medicare pays to health care providers, which is already too low. So what is the chance that 15 million Americans are going to come newly on the rolls, and they're going to carry a card around that pays less than what the doctor can afford to accept to even cover the cost of that care, or otherwise go out of business, what's the chance they're going to find doctors? So what we'll have is a drop in the number of physicians, a steep rise in the demand in health care. And so these people will all end up in emergency rooms.
To my colleagues, it's one thing to have coverage in health care. It's another thing altogether to have access to health care. All you have to do is look at other countries that have socialized health care--Great Britain, Canada, and many others, and even go to the extreme steps of Cuba and North Korea--they all have coverage, and it's free. The problem is there's no access to it. There are shortages. There are waiting times, as much as 1 year, 2 years to get a CT scan. People are dying as a result of that, and they show up in their statistics.
The death rates, for instance, from breast cancer and prostate cancer in the United States are much lower than they are in Canada and Great Britain. They have access to the same medications and the same quality physicians. The only difference is their health care systems themselves.
So let's get back again. I want to really focus on this topic for a moment before I yield time to my friend. And again, back to this idea that many of the taxes are going to be placed upon wealthy Americans in order to pay for ObamaCare. And I'll just step back through them again. There is a 40 percent excise tax on so-called ``Cadillac'' health plans, which would be health plans valued in excess of $10,200 for individuals, $27,500 for families. Those thresholds will grow annually by an inflation rate of 1 percent, which is about a third or less of what it really is.
So what that means is that, as ObamaCare unfolds, having an expensive gold-plated Cadillac health care plan, you're going to get taxed 40 percent more for having it. Well, maybe that's justified. But remember that after a few years, that will not be an expensive, gold-plated plan; that will be an average plan, and you will again have to pay the same 40 percent excise--bracket creep is what they called it back some years ago, and I think it applies here today.
Now, again, increases in Medicare hospital insurance. That's a payroll tax on people who make $200,000 a year individually, $250,000 as a couple, again, only applying to people who are in that $200,000-plus range. And then, of course, I told you the 3.8 percent tax on your investments that are sold for those who, again, make $200,000 or more.
Again, we go back to it. Remember the alternative minimum tax. Remember the luxury tax. Remember the tax that was placed on oil, the so-called ``windfall'' taxes. Ultimately, those taxes all fell to the middle class and below. Those are the ones who were burdened with them and why most of them have been repealed. We would repeal the alternative minimum tax if we could find a way to actually pay for it now because we're spending at a level that we can't afford to repeal it, unfortunately.
So here is this chart, which is very important in this whole discussion. Under ObamaCare, there is an income threshold for receiving subsidy. So if your income is just below $100,000 for a family, a married couple--and I believe that is a family of four total--if you make less than $100,000, or about $95,000 here, you'll get some kind of subsidy beginning in 2012, 2013. However, that subsidy, that line continues out all the way indefinitely, well past 2062 and before. Now, if you make $90,000 or less than $90,000 today, with inflation in those out-years--5 years, 10 years, 20 years, 30 years--you will break through this threshold. So you will not get the support, the subsidy in your health plan in those out-years. You'll get it early so that you think you're getting something, but ultimately that's going to basically go away, and you will not get that subsidy.
Now, also, if you make $200,000 or $250,000 a year, you will be the one paying in for those who need this subsidy. But you see this line comes down because people who make $200,000 today, in 2022 they will still get a check that will say $250,000, but it will be more like $180,000 in today's dollars. With each year, it ratchets it down until finally you get to about 2042, or 2050, in that range. So a check today that says $200,000 on it will buy equivalent to something like $90,000 in those years because inflation devalues the actual currency that you hold.
So what you get is a crossover point where you see the subsidy threshold gets higher and higher. You've got to make more and more money to get that subsidy. But even though your income is the same, or going down, you actually drop out, and you get a crossover point. Where here, even though you're making $200,000 or $250,000, you're making too much for the subsidy, but you're not making too much to be taxed. And that is the problem.
Ultimately, over time, ObamaCare begins to take the subsidies out for those who are middle class and lower, and it begins to add taxes on those who are middle class and above. That is very destructive, my friends. That's the way you end up with socialized health care and with the kind of system that is working so poorly in many other countries.
We still have time to discuss some of these issues further, so I would ask my good friend from Georgia, Dr. Gingrey, to elaborate on some of his points tonight.
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Mr. FLEMING. Would you touch a moment, Dr. Gingrey, on the fact that while we're trying to expand coverage
and all of those things that there will actually be people who will be pushed off their coverage of the health care they have today, such as by their employers. Would you expound on that.
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Mr. FLEMING. Yes.
You say that the threshold is 50 employees and that they lose certain subsidies or certainly face more penalties or costs after 50. What is the chance that a small business that has 49 employees will dare hire another employee?
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Mr. FLEMING. I thank the gentleman. Again, great points.
Estimates are as high as 20 million Americans who are on insurance today through their employers, happy and satisfied with the coverage they have, that will be pushed off. Why? Because the employer, the business will find it at least financially reasonable and perhaps beneficial to just pay the fine, push the employees out into the marketplace, make them go into the exchanges and force them to have to deal with the realities of ObamaCare.
I know that people hearing me say this would say, Well, that's coldhearted. If you really love your employees--and I have a small business and we employ considerably more than 50 employees, and I love my employees and I want them to have the best possible coverage. But look, if I have a competitor out there who can lower his cost by pushing his employees out and paying a penalty and then I go and do the right thing and pay that, then he's going to be able to sell his product at a lower price than me. That puts me out of business. Now not only do my employees not have health insurance, they don't have a job.
Back to this 50 threshold. Any time you have a law in the United States that penalizes an employer for hiring above a certain level, that is a terrible law by itself. It is disincentivizing an employer who is going to say, Well, I'm not going to grow my business. If I can't grow it by leaps and bounds and take tremendous risk and in the process bring in so much money to cover that incremental cost of health care, I'm not even going to try it. In fact, I may just close my business down altogether.
In the remaining moments we have--and I'll be happy to give Dr. Gingrey even further time to add some additional comments--I just wanted to go back again to this broken promise that was mentioned before both by Dr. Gingrey and myself, ``I will protect Medicare,'' President Barack Obama, September 2009. He promised he would protect Medicare.
Where are we today? The Republicans, through the Ryan plan, a very good plan, a very good budget, have a solution that will make Medicare sustainable for an indefinite period of time. The Democrats in the House say, No, we're not in for that. We're not in for anything. We have no ideas.
I'll remind folks in this body that the actuaries, the CBO, and all of the authorities tell us that Medicare runs out of money, becomes insolvent, becomes bankrupt in 4 to 8 years. So it's time that somebody comes up with a plan. We have a plan. We had one this year. We had one last year. We modified it a little bit to make it one that, I think, Democrats could accept, and they still have not signed on to it; although, we have one Democrat in the Senate who has, so it is bipartisan. But the President made the promise and the Republicans in the House are trying to keep it, and Democrats will not go along with that.
Again, to recap: ObamaCare cuts as much as $575 billion from the Medicare program; $200 billion from Medicare Advantage, which is a private form of Medicare that many Americans enjoy and love. It forces over 7 million seniors out of their current Medicare plan. Fifteen percent of hospitals, nursing homes, and home health will close because of Medicare paying less under ObamaCare.
Again, you can't cut out over $500 billion without cutting out reimbursements for something, and that's where it's going to be. It's going to be hospitals, nursing homes, home health agencies, and many other types of services that Medicare provides.
The CBO estimates that Medicare prescription drug coverage premiums will increase by 9 percent as a result of ObamaCare. Mr. Speaker, this is not a tax. It's not an expense just on the wealthy. It hits the middle class and the poor as well.
Finally, the CMS actuary projects the Medicare program could be bankrupt, as I mentioned before, as early as 2016. Medicare costs are projected to grow substantially from approximately 3.6 percent of the size of our economy, the GDP, in 2010, to 5.5 percent by 2035. That's the Medicare trustees.
The physician payment formula in Medicare needs to be fixed or seniors may lose their doctors. It costs $316 billion. We're hearing all over America about physicians who are beginning to back away from seeing Medicare patients. Not because they don't want to, not because they are not willing to sacrifice, but because if they do, they go out of business and they can't make it. Already access is an issue because of money problems.
Twelve percent of physicians stopped seeing Medicare patients due to the broken physician formula that we have and that cannot be resolved and our friends on the other side refuse to address.
In our closing moments, I would be happy to yield to the gentleman, if he has any comments.
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Mr. FLEMING. That's very important, because what I'm understanding you saying is that if the trust fund becomes insolvent and there are checks going out to physicians across America, we can't just connect a line over to the general budget and say we're going to cover the bills. No, they don't get paid. Checks will bounce. This is a problem that must be solved.
So to recap in the final moments that we have--and I want to thank my good friend, Dr. Gingrey, for joining me this evening. We really have a strong group of physicians and nurses and other health care workers in the GOP Doctors Caucus. We hope to be joined by some more next year as a matter of fact. We feel like the physicians are a strong force in the U.S. Congress, not just because they know and understand the health care economy, which is very unique, but also because physicians are unique in a way that we want to make a diagnosis and we want to treat and we want to cure. We're not about kicking the can down the road. We want to cure the disease or solve the problem and move to the next one, and so the more physicians we have here, I think we will.
But again, I want to just reiterate for my colleagues that just because you have a card that says you are entitled to care in the United States does not mean you have access to it. I want to reiterate that. Just because you have a card, just because you have coverage does not mean that the doors will open for you, and this is where our colleagues, I think, are misguided on the other side.
ObamaCare is all about giving coverage, all about giving cards to people, but it does not protect their access to care. Because, in fact, under their system, which is basically based on a socialized model, the only way that the government will be able to afford it, and taxpayers in general, will be to create long lines, create shortages, and say ``no,'' to be traffic cops to people.
And you know what? The parts of our health care system today that are government-run, already before ObamaCare, we are already seeing spot shortages; chemotherapeutic agents, injectable drugs, that are otherwise not expensive, but because of the quirks of this socialized, government-run, highly bureaucratic system, we're finding that the manufacturers can't make them because they don't get enough reimbursement to cover their cost.
So what happens is they slow down, or stop making them altogether, and we have diseases and cancers out there today where physicians are scrounging around looking for the correct chemotherapeutic agent which would cure their disease, and it's very inexpensive and has been around for many years, and we have to even look to other countries to supply that.
With that, I look forward to our next GOP Doctors Caucus. I always enjoy this. I hope that those in this Chamber who listen to this find it at least somewhat informative.
Mr. Speaker, I yield back the balance of my time.