Communism and Starvation in Early America

On June 12, 1987, at the Brandenburg Gate, President Reagan demanded that Mikhail Gorbachev “tear down this wall!” And, Reagan proceeded to disable the Soviet Union when he forced Soviet Communism to fall of its own weight. Few realize, however, that Reagan was beaten to the punch by our first colonial settlements some 380 years earlier.

After landing on a Virginia beach in 1607, the first Jamestown settlers made plans for organizing themselves for self-preservation. Among their plans was a communist system of production and distribution.

Each settler was to put his tools and whatever he produced (there were no women at first) into a central warehouse. Then, each was free to take from the warehouse whatever he needed to live. In went fruit, game, lumber, pelts, axes, saws, hammers, cloth, and out went…everything. Even their Powhatan Indian neighbors walked in and took things, once they discovered that they wouldn’t be stopped.

The settlers had chosen Thomas Studley to run the warehouse. He proved able to talk his way out of blame, but not prevent the outflow. And, he could do nothing about the settlers who stopped working once they learned that they didn’t have to. Then, the starving began.

It wasn’t until Studley died in 1608 (probably of malnutrition), that the settlement came to its senses. Capt. John Smith (yes, that Capt. John Smith) was appointed to replace him and what he found when he entered the warehouse shocked him. The supplies were gone, the tools had been traded by the indolent to the Powhatans for food and the warehouse was in total disarray. What was left had become infested with rats.

Capt. Smith wasted no time in setting things right. In the short run, he made rules for taking things from the warehouse and enforced them with armed guards, but he knew that that system alone would not last. After his election as Jamestown’s Governor, he did away with the communist system altogether.

Smith issued a proclamation: “…he that will not worke shall not eate (except by sicknesse he be disabled), for the labours of thirtie or fortie honest and industrious men shall not be consumed to maintaine an hundred and fiftie idle loyterers…There are now no more counsellors to protect you…”

It worked. Those who had not worked either started voluntarily or responded to necessity. In less than six months, twenty houses were built, a freshwater well was constructed and forty acres of fields were put under cultivation. The settlement no longer starved, as each settler fended for himself. In addition, they created a simple free market in which each bought and sold or bartered what he couldn’t or hadn’t provided for himself.

The same thing happened in the Plymouth settlement, thirteen years later. Shortly after landing at Plymouth in 1620, the Pilgrims set up a storehouse of supplies in which all were to share. Although the supplies were meager in that first winter, each person was free to take from the storehouse at will. The food ran out within weeks and nearly half of the settlement died of sickness and starvation.

The following spring, the survivors were shown by Squanto, their Indian interpreter, how to plant and grow corn and how to fish and hunt game. In the words of their Governor, William Bradford, “All the summer there was no want;” as they “took good store, of which every family had their portion…Which made many afterwards write so largely of their plenty here to their friends in England…”

But, as the year before, it was not to last. By winter, the settlers had taken freely from the supplies until the storehouse was empty…and they starved for a second time.

In the spring of 1622, Governor Bradford returned to the village from a trip only to see a group of able-bodied young men playing a game in the square when they should have been working in the fields. He had seen enough. He chased them off and called for a meeting with the other leaders.

Their solution was to abandon communism and to make each family responsible for themselves. Again, in the Governor’s words, “…and so assigned to every family a parcel of land, …that they should set corn every man for his own particular…This had very good success, for it made all hands very industrious, so as much more corn was planted.”

He concluded, “The experience … may well evince the vanity… that taking away of property and bringing in community into a commonwealth would make them happy and flourishing, as if they were wiser than God. For this community was found to breed much confusion and discontent and retard much employment that would have been to their benefit and comfort.”

It has been said that socialism or communism only works until the money runs out. Our earliest settlers proved that even that isn’t true. The productive people will resent the unproductive takers long before the money runs out. That resentment will build until their incentive to produce is weakened and production goes down, while the unearned taking runs amok. It happened in our earliest settlements, it happened to the Soviet Union and it happens every time such a scheme is resurrected.

Must every such scheme run until it falls of its own weight, or might we learn to reject it in the first place? Governor Bradford thought it was part of the human condition: “Let none object this is men’s corruption, and…seeing all men have this corruption in them, God in His wisdom saw another course fitter for them.” Let us take heed and follow the course fitter for us, before we, too, as a nation fall of our own weight.

Presidential War Powers and the First Barbary War (1801)

“…unauthorized by the Constitution, without sanction of Congress, to go beyond the line of defense.” President Thomas Jefferson, May, 1801 Letter to Congress on protection of American merchant ships against the Barbary pirates of Tripoli.

What are the President’s war powers? They are defined in the Constitution. “The President shall be the Commander in Chief of the Army and Navy of the United States,…” (Article II, Section 2). The President is in charge of the military, but no war powers are conferred directly on the President. Instead, the Constitution confers those powers on Congress, “The Congress shall have Power to declare war…” (Article I, Section 8).

What did the Founders mean when they assigned the war powers that way? The First Barbary War provides a clear picture of their intent.

No sooner had we gained our Independence and formed our Nation than the protection of Europe against the pirates of the Barbary Coast ended. We were on our own and the States of Morocco, Tunis, Algeria, and Tripoli knew it. For 15 years, all four States sanctioned pirates to capture our merchant ships and ransom our seamen or sell them into slavery.

Without a Navy capable of protecting our ships, the United States was forced into a treaty with the Sultan of each State. We paid up to $1 million to each as part of their protection racket. All but Tripoli observed their treaty. Tripoli accepted the tribute but continued their piracy.

Seeing the need for defense against France and the Barbary States, President John Adams built up the Navy and by 1798 Congress was able to authorize Adams to protect our merchant ships against French privateers.

Then, as one of its last acts before Jefferson took office as President, Congress passed a law authorizing six ships “officered and manned as the President of the United States may direct…in the event of a declaration of war by the Barbary powers to protect our commerce and chastise their insolence…”

Immediately upon Jefferson’s inauguration in 1801, the Pasha of Tripoli demanded the next year’s ransom. Jefferson refused and the Pasha declared war on us.

Jefferson sent a naval force only sufficient to defend our merchant vessels. As he expressed in that May letter to Congress, he did not have the power to take action against Tripoli itself, stating further, “…this important function [is] confided by the Constitution in the Legislature exclusively…”

While Congress did not vote a formal declaration of war, it did authorize Jefferson “to cause to be done all such other acts of precaution or hostility as the state of war will justify.” Thus empowered, Jefferson ordered the attack on Tripoli and we prevailed.

Even for a strict act of self-defense, Jefferson relied on Congress to provide legislative authorization. He knew as did Congress (and John Adams, who waited for Congressional authorization to send ships against French privateers) that a President cannot exceed even a “line of defense.”

Over the years, Presidents, both Democratic and Republican, have inched past the “line of defense” going so far as to wage war in all but name, yet we know what the Founders intended. As shown by Jefferson, the Founders knew how a President could use executive power to wage war in his own interests and, in the Constitution, they designed a clear safeguard against it.

Jefferson understood and obeyed the Constitutional limits to his war powers. But, if another President does not, it is up to Congress to enforce those limits. Not all Congresses have exercised this responsibility. Let’s hope that this one will.

5 Star Review of Pilgrims To Patriots

Here’s a terrific book for any grandfather or grandmother who’d like to spend some high quality time bonding with and passing on the story of America’s beginning to a pre-teen grandchild. The book is fast-paced, with short chapter after chapter of carefully researched and engagingly written mini-histories of many of early America’s most important and fascinating events, from the arrival of the Pilgrims to the Revolutionary War and the Declaration of Independence. I’m currently reading the book to my l0-year-old granddaughter, whom I used to read children’s stories to before she began developing a life of her own. She loves the book, and while she’s a good enough reader to read and understand most of it on her own, reading it together is giving us the opportunity to have discussions and share thoughts in a way we would never have otherwise. Great idea, great format, and a true gift to both of us.  R.S., Essex, CT on Amazon.

 

Using the Affordable Care Act – What You Can Do (Bonus)

This is the Bonus segment in my series on how the Affordable Care Act impacts all of us.

In the course of researching this series, I came across a number of additional subjects that I would like to pass along, so I have added this Bonus posting. In this Bonus, I will cover subjects such as what was left out or struck out of the Obamacare Bill, whose idea was Obamacare in the first place and who wrote it, what is the ultimate goal of Obamacare, and what’s being done to implement it.

What Was Left Out of the Affordable Care Act?

Tort Reform. If one of the main goals of Obamacare is to reduce the cost of health care, one would think that Tort Reform would have been a part of it. Civil suits and their attendant multimillion dollar awards against doctors have forced health care costs to increase significantly. First, the cost of malpractice insurance has become prohibitively expensive. Second, in an effort to avoid tort action, doctors have ordered redundant and unnecessary tests and performed defensive procedures. Such protective practices increase the costs of care, in some cases substantially. One would have thought that Tort Reform would have been included in the Bill. Until, that is, we acknowledge that health care tort awards support a good segment of the trial lawyers’ incomes. Is it too cynical to note that trial lawyers contribute heavily to the Democratic Party?

The Public Option. “The Public Option” has come to be thought of as a government takeover of the health insurance industry. It is not, at least in so far as the Affordable Care Act is concerned. “The Public Option” in the latter sense was the establishment of a government insurance operation that would compete with private insurers. Opponents objected that, through subsidies and price fixing, a government insurance operation would put the private insurers out of business and that government-run insurance operations and premiums would then bloat beyond what the private insurers could have provided. As such, “The Public Option” was seen as an indirect takeover. Unable to overcome these fears, Congressional Democrats took it out of the Bill.

State Low Cost Options. Many know that some years ago Massachusetts adopted a health insurance law similar to Obamacare. A much more modest plan exists in the State of Utah. A number of States lobbied to be free to set up their own plans in an effort to learn what approach works best for them. They were denied. Instead, Obamacare centralizes comparative effectiveness research in a new agency – the Patient Centered Outcomes Research Institute. This Institute will be able to conduct its own studies and to fund and oversee studies in higher education and in non-academic research settings.

Exemptions. A number of exemptions to Obamacare penalties have already been cited in the form of waivers, most notably to unions and select corporations. Many more were written right into the Law, including:

 Sufferers of financial hardship (defined as cost of insurance to them as being over eight percent of their income).

 The very poor (defined as having income below the tax filing minimum).

 Native Americans.

 Those who are uninsured for a brief time (defined as three months or less).

 Prison inmates.

 Persons having religious objections.

 Illegal aliens.

 Members of Congress and their staffs (see below).

 The President and his family.

Whose Idea Was This Anyway?

The Administration won’t say whose idea this was nor who wrote the Bill. This shouldn’t be a surprise to those who recall that Congressional Democrats wouldn’t even allow the Bill to be read until after it was passed. There are three likely sources of the Bill:

1. Jacob S. Hacker for George Soros’ Economic Policy Institute. Hacker is a Yale professor who in 2001 delivered a report titled “Health Care for America” to Soros’ Agenda for Shared Prosperity. This report is said to be the blueprint for Obamacare. Then, in 2003, Hacker produced a new plan that was proposed to be the National Healthcare Insurance Act of 2005.

2. Jonathan Gruber for Massachusetts. Gruber is an MIT professor of economics who conceived and drafted the legislation for the Massachusetts law. Under contract with the U.S. Health and Human Services Department, Gruber also conducted the economic analysis of the Obamacare Bill.

3. Liz Fowles for Senator Max Baucus, (D) Montana. Fowles is said to be the author of the actual Obamacare legislation. Baucus is the Chairman of the Senate Finance Committee from which the Bill came. Fowles was Chief Counsel to the Committee from 2001 to 2005. Then, she was Vice President for Public Policy at Wellpoint, one of the nation’s largest private health insurers. In 2008, she went back to Baucus’ staff. In November, 2008, she delivered to the Committee an 87 page whitepaper which is said to have been the blueprint for the actual Bill. Thereafter, she supervised the Bill writing team. She is now said to be working directly for President Obama, although a return to the private sector again may be in the offing.

Implementation of Obamacare.

Implementation efforts have been underway to one degree or another in the Administration as well as in the States. Although very little of the mechanics have been made known, these are some key observations:

New Government Agency. $400 million has been allocated for the creation of the new government agency to implement Obamacare – the Centers for Medicare and Medicaid Services. Among many other duties, the Centers will operate call centers and outreach services to inform the public of their rights and requirements. The Centers will also process applications for state exchanges.

Selling Obamacare. The Department of Health and Human Services has hired the advertising agency of Weber Shandwick to promote the law and the exchanges. The original contract of $20 million has been expended and an additional $11 million has now been granted. In addition, George Soros is reported as has given $5 million for advertising.

“Navigators.” Due to the complexity of Obamacare and the unlikelihood that the public will understand it, the State of California has announced that it will hire and train some 21,000 “navigators.” These will be outreach workers who will counsel the public and usher them through the process. It is likely that at least some other states will be required to do the same kind of thing.

Set Up of the Exchanges. The state of progress in setting up exchanges is in flux. Not all states have made a final decision as to whether or not they will operate their own exchanges or turn this over to the federal government. Few states have made significant announcements beyond the participation/nonparticipation level. The U.S. Department of Health and Human Services has been preparing to take over the set up of state exchanges since 2010, but can do little until each State makes its official announcement. Since the factors affecting each State’s needs vary significantly, it is expected that extreme confusion is likely in the early implementation period.

Goals of Obamacare. The stated goals of Obamacare have been:

• Assure that as many of the estimated 31 million uninsured people as possible become insured.

• Add benefits and protections to those already insured and the newly insured.

• Reduce the costs of medical care.

• Reduce the costs of Medicare and Medicaid.

• Reduce the costs of insurance premiums.

I leave it to the reader to deduce what the unstated goals may be and to assess whether the goals are met and whether it will have been worth the trip.

Current Events. These are some of the latest developments in the Obamacare story, as of this writing:

• Estimated costs of Obamacare to the average family are going up. Instead of going down, as advocates of Obamacare predicted, the Congressional Budget Office’s estimate in 2012 was $2,000 more per year than they are now paying. On April 30, 2013, Elizabeth Colbert, Democratic Representative from South Carolina estimated the cost now to be $4,000 per year more than they are now paying.

• Congress is in the process of or has already passed an exemption from Obamacare for itself, their staffs and the President and his family (see above).

• Congress has granted health insurance companies an anti-trust exemption (citation needed).

• The first rollout of Obamacare application forms brought howls of complaint – it’s length rivaled the tax forms and it was too complex to understand. This week a revised version was released. It was down to five pages, minimum, for single people and 24 pages for families. It still requires the reporting of all family finances, so applicants will be urged to gather past years’ income tax returns, pay stubs and family financial records before starting to fill it out.

• Senator Max Baucus, the purported supervising author of Obamacare, abruptly announced his retirement from the Senate last week, citing Obamacare as a “train wreck.” President Obama replied, “All major legislation is a train wreck when first implemented.” Cynics expect to see Baucus turn up in the Public Policy department of one health insurance company or another or as a lobbyist for the health insurance industry.

This ends my series on Obamacare. This is as simple as I can make it. The law has been reduced to 907 pages (from the 2,700 page Bill) while the regulations have grown to 15,000 pages, so far. There are other provisions that will come to light as the law is understood, interpreted, massaged by regulations, and, perhaps, amended. This entire area of public policy is likely to change, perhaps dramatically, as more people begin to find out what is in it, so attention to the news from Washington is strongly advised. Be an informed citizen.

Using The Affordable Care Act – What You Can Do (Part 3)

This is the third in my three part series on how the Affordable Care Act impacts all of us.

In this Part, I present the changes required by Obamacare that you can expect in coming years, including taxes, insurance premiums, health insurance coverage, and medical practice. Here’s the third Part:

Part 3: Coming Changes

Timetable.

To Date.

o Children no longer rejected for pre-existing conditions.

o Children up to 26 can be carried under parents’ policy.

o Lifetime limits on insurance plan benefits lifted.

o Phase-in of annual benefits limit removal.

o Policy cancellation for frivolous reasons ended.

o Small business tax credit of 35% begins.

o Medicare prescription “donut hole” phasing out.

o HSAs and FSAs prohibited from paying for OTC drugs.

o Income tax deduction threshold for medical expenses rises from 7.5% to 10%.

January 1, 2014 – D DAY!

o Medicaid eligibility rises to 133% of federal poverty line.

o Health exchanges open for business in participating States.

o Penalty (max. $285 in 2014) for not having insurance kicks in.

o Adults no longer rejected for pre-existing conditions.

o Adults under 30 eligible for low cost catastrophic insurance through State exchanges (cheap way to avoid Penalty).

o “Essential Health Benefits” must be covered in new insurance plans.

o Small business tax credit increases to 50%.

2015.

o Penalty for not having insurance goes up to max. of $975.

o Small business tax credit expires; small businesses must pay full employer costs.

o Independent Payment Advisory Board begins cost cutting proposals.

2016.

o Penalty for not having insurance goes up to max. of $2,085.

2017.

o States can open exchanges to large businesses (over 100 employees).

2018.

o Independent Payment Advisory Board proposals can be implemented.

o 40% tax on premium insurance plans begins.

2020.

o Medicare prescription “donut hole” disappears.

New Taxes (not including cuts to Medicare spending).

 Penalty for not having insurance (described above and in Pts. 1 & 2).

 Penalty on employers for not providing insurance (eligible companies).

 Medicare payroll tax increase on high earning employees from 1.45% to 2.35%, totaling 3.8%.

 New Medicare tax on investment income and home sales of high earners (transfer tax) of 3.8%.

 New fees on health insurance and pharmaceutical companies totaling CBO estimated $107 billion over next ten years.

 40% tax on premium health insurance plans (described above and in Pts. 1 & 2).

 Penalty for HSA and FSA OTC drug purchases increased from 10 to 20%.

 New excise tax on medical devices of 2.3% (from tongue depressors to MRIs). Expected to impact negatively investment in R & D.

 Medical expense income tax deduction threshold raised from 7.5% to 10%.

 New tax of 10% on tanning services.

Insurance Premiums.

 Insurance premiums are rising for almost every group. The Kaiser Foundation reported an increase of 9% from 2010 to 2011. The CBO estimate of the impact of Obamacare on premiums over all groups is a $2,000 increase.

 Employers pay 70% of the total cost of their employee health insurance plans, on average. Premium increases will cost them far more than they will cost their employees. Using the CBO estimate as a basis, it will be a $5,000 increase on employers’ premiums, bringing the average well above $15,000 per employee. Employers are weighing the advantages of dropping health insurance as an employee benefit and paying the $2,000 penalty instead.

Health Insurance Coverage.

 As of January 1, 2014 all new insurance plans, of any kind, must cover “essential health benefits.” The problem is that this term has not yet been defined. In November, 2012 the Department of Health and Human Services issued a list of ten general benefit categories, but gave no specifics as to each. The concern has not been allayed that insurance plans will be reduced over time to include only “essential health benefits” when end-of-life decisions are being made on allowable services.

Health Insurance Companies.

 Health insurance companies appear to be the big winners in Obamacare, at least in the short run. While the debate before its passage suggested that Obamacare might put them out of the health insurance business, and that might still be a long term objective, the addition of up to 30 million new government subsidized and/or guaranteed and/or mandated policy holders appears to have changed these companies from opponents to strong supporters.

Drug Companies.

 The big drug companies will also win under Obamacare. The additional 30 million in insured plus the additional drugs for existing policy holders motivated them to agree to the $107 billion in taxes (see above) and the additional rebates to Medicaid recipients.

Health Insurance Exchanges.

 Exchanges are proposed to be central “stores” in each State where people without insurance at their job can go to look at their options and to buy. Obamacare requires that there be an exchange in each State, but it does not require that each State provide one. A State may choose not to set up its own exchange, in which case the Federal Government’s exchange will be substituted.

 Several States have announced that they will not set up their own exchanges. One objection is that the Federal Government doesn’t know what will constitute an acceptable exchange, so States would have to guess only to be found inadequate after the fact. Another objection is that the Federal Government cannot predict how much State exchanges will cost each State. And, the biggest objection appears to be that the States will have to carry the full costs of subsidies as the Obamacare subsidies are withdrawn, either as scheduled or before.

 The participation of States in providing exchanges continues to change as the Federal Government tries to flesh out the plan and make adjustments. The deadline of 2014 appears to be in jeopardy for any quality solution.

Medical Practice.

 It appears that doctors will be the big losers in Obamacare – the profession that we least want to be damaged. They will be flooded with new patients whose requirements will challenge their schedules. They will receive lower fees for service, in many cases much lower. Their administrative costs and time requirements will multiply. They will still be liable for malpractice claims and malpractice insurance rates as before. The estimates of doctors leaving the profession appear to be real.

 Nurses, physicians’ assistants and allied health professionals will be winners in Obamacare. As attempts are made to force down the costs of health care, more procedures will be allocated to the technical level of the hierarchy from the doctoral level. It remains to be seen whether this will impact the quality of care. The doctors say yes; the nurses and physicians’ assistants say no.

 Hospitals and related facilities also stand to lose under Obamacare. Reductions in Medicare rates will decrease their income. While increasing the numbers of insured is designed to lower the demand for emergency room care, the theory is up against the tendency of people to continue their habits. The same can be said for community health centers which are designed to relieve the burden of illegal aliens and other uninsured on emergency rooms, but whose impact is speculative.

These seem to be the main Obamacare provisions that will affect us in the future. There are others, no doubt, that will come to light as the law is understood, interpreted, massaged by regulations, and, perhaps, amended. This entire area of public policy is likely to change, perhaps dramatically, as more people begin to find out what is in it, so attention to the news from Washington is strongly advised. Be an informed citizen.

In the course of researching this series on Obamacare, I came across a number of additional subjects that I would like to pass along, so I am adding a Bonus posting. In this Bonus I will cover subjects such as what was left out or struck out of the Obamacare Bill, whose idea was Obamacare in the first place and who wrote it, what is the ultimate goal of Obamacare, and what’s being done to implement it. This Bonus will be my next post.

Using The Affordable Care Act – What You Can Do (Part 2)

This is the second in my three part series on how the Affordable Care Act impacts all of us.

In this Part, I present how Obamacare affects groups of which you might be a part.

In the third Part, I will present the basics of changes required by Obamacare that you can expect in coming years, including taxes, insurance premiums, health insurance coverage, and medical practice. Here’s the second Part:

Part 2: Obamacare’s Effects on Groups Affecting You

Seniors. Senior citizens are significantly affected by Obamacare, good and bad.

Good. Medicare coverage for prescription drugs and some preventive care programs has been increased.

Age-based health insurance premiums have been capped.

Bad. Medicare payments have been reduced by over $700 billion through 2022 to help pay for Obamacare.

The Medicare Advantage program has been effectively eliminated (see my Part 1).

Obamacare’s Independent Payment Advisory Board is given broad power to cut the Medicare budget and withhold approvals for individual treatments.

Price discrimination on premiums against seniors will continue under Obamacare, but the differential will be capped at no more than three times the rate charged the middle-aged.

Children. Obamacare does not have much of an effect on the situation for children one way or the other since children are already guaranteed health insurance under Medicaid (if not covered under a parent/family plan).

Good. Private insurance plans can no longer reject coverage to children with pre-existing conditions.

Ages 18 – 29. People in this age range are affected positively and negatively by Obamacare.

Good. The age of single children eligible for their parents’ health care plan coverage is now 26 (up from 18), as they now must be covered as dependent children, as long as that plan covers dependent children. Bad news accompanies this provision, though (see below).

More people in this age range will end up being covered by health insurance.

Bad. Dependent children up to age 26 will not be covered: 1. If the parent is retired and under 65; 2. If the parent is already on Medicare; or 3. If the dependent child is able to get health insurance through their employer.

People in this age range are least likely to want health insurance. They will pay at least $2,000.00 either through the penalty (see my Part 1) or through the health insurance that they are coerced to buy in avoidance of the penalty.

Currently Insured. Obamacare has pluses and minuses for the currently insured.

Good. The policy holder will have new benefits (see this Part and Parts 1 and 3).

Bad. Your premiums will increase.

Your employer’s premiums will increase. This may force your employer to discontinue providing health insurance.

If you make non-allowable health care purchases using a Health Savings Account, the penalty will go up to 20%.

If you have a Flexible Spending Account, your employer will be allowed to contribute no more than $2,500.00.

Medicare benefits will be cut and Medicare reimbursement rates will be cut, forcing some plans and providers to stop providing care to Medicare recipients.

So many more people will be on Medicaid that providers will likely be overwhelmed and availability and quality of care will likely be compromised.

Currently Uninsured. Overall, Obamacare is good for people who now have no insurance and want to be insured.

Good. Low income earners will be able to get health insurance through Medicaid or a subsidized plan through a State or Federal Exchange.

High income earners will be able to get health insurance through an Exchange at a rate lower than what they would be able to get as individuals shopping on the open market for themselves alone.

Bad. Only if you don’t want to have health insurance (see my Part 1).

Taxpaying Public. Obamacare imposes a number of new taxes over and above the penalties it imposes. These taxes are estimated at over $400 billion in the next ten years.

Capital Gains. An additional 3.8% on capital gains for families earning $250,000 and above. While the gain is offset at least in part by the homeowner’s exemption, the effective rate goes from 15% to 18.5% when you sell your house.

Medicare. Tax rate goes from 1.45% to 2.3% for higher earning families.

Premium Insurance Plans. A tax of 40% will be applied to the premiums of premium health plans, regardless of income level.

Middle Class. The impact of Obamacare on the middle class will depend on the income level of each family. On average, it is estimated that health insurance premiums will go up by $2,500.00 (Congressional Budget Office).

Unemployed. Those looking for work are likely hurt by Obamacare. With the costs of Obamacare to them as yet uncertain, employers have reported being reluctant to hire more employees.

Illegal Aliens. Obamacare has increased the funding of community health centers that illegal aliens use for health services. Illegal aliens will be unable to participate in the health insurance exchanges, Medicare or Medicaid. However, neither will they be subject to the individual mandate (penalty).

Large companies. Large cost increases have led to waivers granted to selected companies. These waivers are short term and the costs may encourage many companies to drop insurance and pay the $2,000.00 penalty as the cheaper alternative. On the other hand, in order to compete for the best employees, some companies may keep health insurance and adjust pay rates accordingly.

Small business. Small businesses are defined by Obamacare as 25 or fewer employees (down from the traditional 50). Those companies will benefit in the short term from the tax credit (see my Part 1). Once the credit expires, they will have to depend on the health insurance exchanges to reduce costs. Exchange-based health insurance policies will be transferable from one employer to another.

Union members. Of the over 1,600 waivers granted by the Administration, nearly 1,000 have gone to unions. These waivers have buffered union members from increases in insurance premiums. These waivers expire in 2014 and, unless they are extended, union members will be faced with the same cost increases as non-union workers.

Doctors. Despite public support by the AMA, doctors as a larger group suffer under Obamacare. Rates for Medicare services are reduced, but more importantly, Obamacare imposes a different payment system (Accountable Care Organizations) that would replace the current system. Polls have shown that up to 40% of doctors would retire and/or get out of the patient care business.

Patients. With fewer doctors and up to 30 million additional patients seeking service, quality of care is likely to go down, waiting times are likely to go up and approvals of treatment are likely to be withheld.

Allied Health Professions. Their jobs will be harder, but more secure and better paying. The demand for lower cost service providers will increase as doctors leave the profession or forego routine procedures. However, Obamacare will impose additional documentation requirements on the support teams.

End of Life. Obamacare’s program for end-of-life care (CLASS) had to be scrapped because of costs. Nursing homes were the winners, as were their residents. CLASS called for a stitched-together plan that would have kept more people at home… and away from needed 24/7 supervision and emergency care.

These seem to be the main Obamacare provisions that affect most of the groups with which we are associated. There are others, no doubt, that will come to light as the law is understood, interpreted, massaged by regulations, and, perhaps, amended. This entire area of public policy is likely to change, perhaps dramatically, as more people begin to find out what is in it, so attention to the news from Washington is strongly advised. Be an informed citizen.