Resurgent U.S. manufacturers face headwinds from Obamacare’s mandates and taxes, but the law’s namesake has two more years in the White House and public benefits will be hard to reel back despite the recent midterm election results, National Association of Manufacturers President and CEO Jay Timmons said.
That means any pro-business reforms to the president’s health care law will have to arrive piecemeal and not through full repeal in the new Congress, Mr. Timmons said in an interview.
Mr. Timmons said a series of provisions in the 2010 law are making U.S. companies less competitive. They include an insurance mandate that will phase in over the next two years and force larger employers to provide health insurance or pay fines, an excise tax on medical device makers and, starting in 2018, a “Cadillac tax” on high-priced, comprehensive health plans.
Promises that Obamacare would cut health costs are not bearing fruit for his members, Mr. Timmons added, compounding the sector’s problems and making it difficult to stay afloat.
Congress, among other things, should let health plans compete across state lines and pass medical malpractice and tort reform to achieve Washington’s goal of expanding health care access and reducing costs, he told The Washington Times in a wide-ranging interview.
“It can’t be done on the backs of those folks who are trying their best to provide benefits to their employees, and those who are trying to create the new medications and devices that will help us be a strong and more healthy nation,” he said.
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The Affordable Care Act sought to extend health coverage to people without job-related insurance by expanding Medicaid and offering subsidized insurance on state-based health exchanges. It authorized a series of a taxes to pay for it all, and established insurance mandates on individuals and large employers to balance risk and keep costs in check.
The Obama administration says the law is working as intended, citing evidence that states are cutting their ranks of uninsured people and that the reforms contributed to the recent slowdown in health spending.
But Mr. Timmons said the law is dampening a manufacturing revival coming out of the Great Recession.
Firms that want to offer generous health coverage will be socked by the Cadillac tax, which starting in 2018 imposes a 40 percent excise on the amount of annual premiums that exceed $10,200 for an individual and $27,500 for families who hold the top-tier health plans.
“You’re going to see employees that have a lot of tenure at a company — certainly businesses that want to offer the most generous and comprehensive plans possible — that are going to be unfairly burdened and disadvantaged by that tax,” he said.
And the 2.3 percent excise tax on sales by medical device manufacturers will make the sector less competitive, he said, cutting into “our ability to be the world leader when it comes to medical advances.”
Democrats in states with a large number of device manufacturers dislike the tax, which took effect in 2013 and is ripe for repeal when congressional Republicans take control of both chambers in January. However, lawmakers would need to come up with an estimated $30 billion over 10 years to offset lost revenue.
“I think the American people elected the current Congress to govern, and creating holes in the budget does not probably meet their definition of that,” Mr. Timmons noted. “We want to get ride of that medical device tax, but it would be helpful if we could look at this in total, and as a whole package.”
Attempts to repeal and replace Obamacare will be thwarted by the White House, he acknowledged, and the next president will be unable to roll back the law’s benefits unless he or she has a “well-thought-out” plan to move the health system forward.
For now, he said companies are trying to stay afloat amid a rising tide of health costs.
“The worst law,” he said, “is the law of unintended consequences.”
• Tom Howell Jr. can be reached at thowell@washingtontimes.com.
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