Stanley Feld M.D.,FACP,MACE

I received a note from a reader last week. I debated with myself whether or not to publish it. Americans have discovered, and are continuing to discover, President Obama’s many lies/deceptions about Obamacare.

He kept telling us that the law would only tax families earning over $250,000 a year. People earning less than $200,000 per individual and $250,000 per family will not pay a dime more in taxes.

“No family making less than $250,000 will see "any form of tax increase."

"I can make a firm pledge. Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes."

Sources:  President Obama

Subjects: Taxes”

It has become apparent that President Obama and his administration have told the American people many lies during his administration. The lies are at best half-truths. President Obama promised us an administration that would be totally transparent and truthful.

Americans trusted him to live up to his promise.

Many believed him only to find out he was not telling the truth.

The traditional media has supported many of President Obama’s lies. This same media had zero tolerance for George H Bush’s (41) lie.

 “Read my lips’. No new taxes.”

 There are at least ten hidden taxes imbedded in Obamacare.

In the last few weeks we learned that an insurance industry bailout was imbedded in Obamacare. President Obama knew about the bailout at the time Obamacare was passed.

Nancy Pelosi was correct. “We won’t know what is in the bill until we passed it.”

Americans used to trust their leaders. This administration has made us very cynical.

There is something called a “Medical Device Excise Tax.”  This medical device excise tax is in the original Obamacare legislation. The 2.3% tax is imposed on the manufacturers of the medical device.

The 2.3% is ultimately passed on to all, both the rich and the poor.

The reader sent me the following:

 "The 2.3% Medical Excise Tax that began on January 1^st, 2013 as part of Obamacare’s tax structure is supposed to be "hidden" from the consumer, but it's been brought to the public's attention by hunting and fishing store Cabela's who have refused to hide it and are showing it as a separate line item tax on their receipts, the email states.

I did some research and found directly from the IRS 's website information that PROVES this to be true and an accurate portrayal of something hidden in Obamacare that I was not aware of! Now being skeptical of this I went to the IRS website and found this!"

"Q1. What is the medical device excise tax? A1. Section 4191 of the Internal Revenue Code imposes an excise tax on the sale of certain medical devices by the manufacturer or importer of the device sales of taxable medical devices after Dec. 31, 2012.

Q3. How much is the tax? A3. The tax is 2.3 percent of the sale price of the taxable medical device.

See Chapter 5 of IRS Publication 510, Excise Taxes, and Notice 2012-77 for additional information on the determination of sale price.

 Chapter Five

So being more curious I clicked on "Chapter 5

of IRS Publication 510."

And what do I find under "MEDICAL DEVICES" under

"MANUFACTURERS TAXES"?

The following discussion of manufacturers taxes

applies to the tax on:

Sport fishing equipment;

Fishing rods and fishing poles;

Electric outboard motors;

Fishing tackle boxes;

Bows, quivers, broadheads, and points;

Arrow shafts;

Coal;

Taxable tires;

Gas guzzler automobiles; and

Vaccines."

"I think we have definitely been fooled, if we believe that the Affordable Care Act is all about health care. It truly does appear to be nothing more than a bill laden with a whole lot of taxes that we the people have yet to be aware of."

"Please pass this on. I am still incredulous that this can go on.

Where is our press ?  

What is next? What else is there we do not know about? God help us ."

 This is not the first time we have not been told the truth by this administration.

http://youtu.be/VQb8MFUn3QQ

However I did my own fact checking and discovered that the author misread Chapter 5 of IRS Publication 510 Excise Taxes, and Notice IRS Publication 510.

The publication deals with all things subject to excise taxes. Chapter 5 covers “manufacturers taxes” of which the medical devices excise price 2.3% is a part of.

The anonymous author found the list of items including fishing equipment, bows and cars. Some of these excise taxes existed pre Obamacare.  Some of the manufacturers excise taxes are a result of Obamacare. They are all separate from the medical device excise tax.

The publication says the tax on fishing rods and fishing poles is a 10% excise tax not to exceed $10 per article.” The tax on fishing tackle boxes and electric outboard boat motors is 3 percent of the sales price. The tax on bows is even higher, at 11 percent.

Cabela’s sales reflect the manufacturer excise tax because the increase in cost of manufacture of the item is passed on to the consumer.

Cabela was wrong in adding 2.3% to the final bill. It misread the law. The sporting goods store realized its error the first week adding stopped adding the excise tax. Cabela repaid customers who were charged the excise tax.

One must think of the increase in price of an item to all consumers for the manufacturers’ tax is in reality a hidden tax to the middle class. It reduces the consumers’ purchasing power.

This is true for the tax on tanning bed salons also.

What additional Obamacare taxes are affecting the under $200k/$250k earners?

1. Obamacare Home Sales Tax increases taxes on unearned income by 3.8%. 

2. Obamacare increases the medical expense deduction threshold. Unreimbursed medical expense deductions will now be available only for those medical expenses in excess of 10% of AGI, which has been raised from 7.5%.  

3. Starting in 2018, the new health care law imposes a 40% excise tax on the portion of most employer-sponsored health coverage that exceed $10,200 a year and $27,500 for families.

Unions who have negotiated these healthcare plans for its members are upset because the tax will severely affect its membership. Members might elect to quit the union.

There are many more hidden taxes I have not discussed in this discussion.

Democrats now admit after going through the new Obamacare taxes line by line that those taxes will increase the tax burden and decrease the purchasing power of the middle class.   

President Obama has promised that Obamacare will help all Americans get access to quality affordable healthcare and new benefits, rights and protections.

So far Americans have seen the opposite occur.

The reaction to the Cabela incident is simply an indication of the middle class’ cynicism. President Obama promised people making less than $250,000 a year will not pay one dime more in taxes.

It is clear he knew that was a false promise at the time.

Americans do not trust President Obama anymore.

 The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.

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Stanley Feld M.D.,FACP, MACE

Is President Obama trying to destroy the healthcare system in America?

Yes he is!

 Actually he is right on schedule to have Obamacare implode on itself.

 I remember when he told Barney Frank and John Kerry not to worry about not including the Public Option in the Affordable Care Act.  We will get to a single party payer system.

http://youtu.be/f3BS4C9el98

http://youtu.be/-522hcm3woA

They did not understand how President Obama could make such a compromise. They thought the Public Option was the only way in the Affordable Care Act Obamacare) to get to their goal.

The goal was a single party payer system.

They did not have the votes then and they do not have the votes now.

President Obama has used a lot of trick plays to get his way in passing and implementing Obamacare. I have pointed out these trick plays along the way. They should be reviewed.

As hard as it is to believe, it seems that President Obama wants his legacy legislation Obamacare to fail.

Otherwise he would not have had Obamacare constructed with so many perverse incentives for stakeholders.

The only route to success is to align both primary and secondary stakeholders incentives. Obamacare is misaligning all of the stakeholders' incentives.

The incentives are more misaligned now than they were in the dysfunctional healthcare systems days before Obamacare.

The stated goal of Obamacare was to provide affordable healthcare insurance to all, with access to quality care to all without rationing of care.

The effect of Obamacare has been just the opposite. The healthcare insurance coverage will not be universal. It is unaffordable to many in the middle class. It is also unaffordable to many of the subsidized poor that do not qualify for Medicaid. There is limited access to care. There is an increase in the rationing of care.

President Obama claimed Obamacare’s health insurance exchanges would create a competitive free market insurance system.

The health insurance exchanges would force the healthcare insurance companies to be competitive. Healthcare insurance competition would lead to a decrease in healthcare costs.

Health insurance exchanges have not worked as advertised. President Obama’s health insurance exchanges have not resulted in a competitive free market system.

Healthcare premiums have skyrocketed.

Healthcare insurance deductibles and copays are higher.

Hospitals and doctor networks are skimping for two reasons. Doctors and hospitals are choosing not to participate in Obamacare. Healthcare insurance companies are not electing to include many well known  doctor and hospital networks.

Many excellent drugs are not on the insurers' formularies because of the cost. When newer brand name medications are on the formulary the co-pays are unaffordable to patients who need them. Patients therefore do not fill the prescription.

The healthcare insurance premiums are often higher than what consumers previously paid for their private insurance pre Obamacare even after some consumers receive government subsides.

The Obama administration will conclude soon that the free market healthcare system does not work. 

The administration will claim that only healthcare system that will work is a government single party payer system.

However, President Obama has not created a free market healthcare system with his health insurance exchanges. It is a highly regulated market.

In his over regulated marketplace he has created incentives that have further misaligned stakeholders vested interests than they were pre Obamacare.

In the Obamacare system the healthcare insurance companies are led to believe they remain the king of the healthcare industry. They believe they can continue to control healthcare costs.

The government remains totally dependent on the healthcare insurance industry. The healthcare insurance industry performs all the administrative services for government healthcare programs.

In performing these services the government has permitted the healthcare insurance industry to pad direct patient care costs with items that are insurance companies expenses and should not be counted as direct patient care.

The increased distortion is magnified when the government dictates the benefits the insurers must offer patients in the health insurance exchanges and the private insurance markets.

This causes the premium prices to skyrocket .

Consumers might not need these added government benefits. Consumers have no choice. They have to pay for unneeded benefits. These benefits are added to the cost of insurance as well as the net profit of the healthcare insurance companies.

The healthcare insurance industry is also permitted to choose their own networks of physicians and hospitals.

The insurance companies try to maximize their net profit at their lowest cost. Therefore they have kept the best hospital and physicians out of their networks. This affects the quality of care.

It must be realized that quality of care has not been adequately defined or accurately measured.

 In some cities and states consumers only have one insurance carrier. Other carriers have opted out. There is not even a pretense of competition.  This insurance carrier usually picks the hospitals and physicians that will accept the lowest reimbursement. The healthcare insurance industry is offering low fees to providers. They will take only those providers into their networks that accept those low fees.

An additional incentive distortion is the Obamacare requirement for the healthcare insurance companies to charge the same premium for anyone who signs up for Obamacare.  There is no risk weighting permitted.

The hope is all consumers will sign up and enable the industry to keep premiums down.This rule generates two negative incentives. The healthcare insurance industry must overcharge the healthy and undercharge the sick. Therefore the healthcare insurance companies try to attract the healthy and avoid the sick.

This has backfired on Obamacare. The healthy young have realized the trap. They are not signing up in the heath insurance exchanges.

Previously when they were employed the employer didn’t mind covering the young. The young help lowered the overall premium because they were young healthy.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           &#
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There are only two options left to the government. Obamacare can bail out the insurance industry and bully the healthy and low risk young into buying healthcare insurance from the government health insurance exchanges.

Many cities, towns and stats have underfunded healthcare coverage commitments. These local commitments include retirees. These cities, towns and states can now dump these consumers into Medicare and the health insurances exchanges.

In addition, there are many people who have chronic illnesses who have been afraid to leave their jobs because they could not get healthcare insurance in the individual market in the past.

These patients can now obtain insurance in the health exchanges at the same cost as everyone else. This will further contaminate the risk pool and increase the health insurance exchange premiums.

The Obama administration figures all taxpayers will cover the added costs. Taxpayers will bail out insurance companies for the poor risk pools that are decreasing their profits.

It looks like the real purpose of Obamacare is to destroy the relationship between the employer and his employee by driving employees into the health insurance exchanges just as it has destroyed the relationship between the consumers and their physicians.

President Obama understood this as the bill was written.  

Small employers are dumping employees from their healthcare insurance plans into the individual market and the health insurance exchanges.

In 2015 group employer insurance will affect an estimated 80 million people. They will loss their insurance and be forced into the health insurance exchanges.

The insurance industry will quit providing insurance and President Obama’s plan  to have a single party payer will occur by default. 

Taxpayer will pay the difference through higher taxes. In the meanwhile nothing has been done in making healthcare premiums more affordable, access to care more available, quality of care better or preventing the rationing of care by a government body.

Consumers will not stand for government control over their healthcare decisions.

There is a better and cheaper way. It is to put the consumer in charge, not the government.

 The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.

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