Tuesday, 22 October 2013

ObamaCare Brings About Massive Increase in Regulations

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President Obama’s signature healthcare law comes equipped with a seemingly endless amount of regulations, published in the Federal Register. According to CNS News, there are approximately 11,588,500 words of ObamaCare-related regulations, drastically surpassing the 381,517 words found within the healthcare law itself.

“That means unelected federal officials have now written 30 words of regulations for each word in the law,” CNS News writes.

Since the passage of the so-called Affordable Care Act and the Health Care and Education Reconciliation Act, federal agencies have published 109 regulations that dictate the implementation of the new laws.

The 109 regulations amount to an additional 10,535 pages in the already full Federal Register.

This is in addition to the 11,000 + pages of regulations the Obama administration has already added to the Federal Register.

CNS breaks it down:

The Federal Register represents the regulations in relatively small type with three columns of text on each page. CNSNews.com calculated that there is an average of 1,100 words on each of these pages by counting the actual words in one 78-page Obamacare regulation and then dividing it by 78.

At an average of 1,100 words per page, the 10,535 pages of Obamacare regulations consist of approximately 11,588,500 words.

The final regulations for just the individual mandate provision of the healthcare law is 75 pages, defining to whom the mandate applies, all the exemptions, and what types of insurance satisfy the government’s rules.

According to a report from the House Committee on Ways and Means, there are over 80 million hours of rules and regulations that American businesses and families have to comply with. Examples found within that report include:

• Return of the organization exempt from income tax under section 501(c), 527, or 4947 (a) (1) of the Internal Revenue Code: 25,766,156 hours

• Form 3800, General Business Credit: 5,307,500 hours

• Credit for Small Employer Health Insurance Premiums: 40,189,456 hours.

• Quarterly Federal Excise Tax Return: 4,366,381 hours.

Former IRS Commissioner Fred Goldberg states that in its current form, ObamaCare “will be a needless administrative and compliance quagmire for millions of Americans.”

The addition of the thousands of pages of regulations related to the healthcare law should come as no surprise, as the size of the Federal Register has increased by 7.4 percent under President Obama, between the years 2009 and 2011. In 2009 alone, the increase was 3.4 percent, or 5,359 pages, the most over the last decade, until 2011, that is.

The figures are even more shocking when compared to Obama’s predecessor, President George W. Bush, whose administration witnessed an increase in the Federal Register of 4.4 percent in the first three years of the Bush presidency.

Still, even as Obama’s regulations surpass Bush’s, the increase in regulations over the last decade is unacceptable.

Over the last 10 years, the federal government has imposed over 40,000 new rules, bringing the total number of pages of rules to well over 180,000. To put this into perspective, the number of rules found in the Register in 1975 was 71,244 pages.

Federal regulations remain a significant obstacle to economic growth. Randy Johnson of the U.S. Chamber of Commerce cited a Congressional Research Service analysis of a 2008 study that estimated the annual cost of compliance for all federal regulations at $1.7 trillion that year.

Putting these figures into perspective, the Chamber of Commerce determined based on that study that if every U.S. household paid an equal share of the federal regulatory burden, each household would be responsible for $15,586 in 2008.

“I think these kinds of figures, if you put yourself in the place of a business person you’ll find them fairly mindboggling,” Johnson said.

In 2011, economic expert and CEO or Euro Pacific Capital Peter Schiff testified before the House Sub-Committee on Government Reform and Stimulus Oversight on the negative impact of regulations on job growth. He said, “Regulations have substantially increased the costs and risks associated with job creation. Employers are subjected to all sorts of onerous regulations, taxes, and legal liability.”

And the consequence of this is that companies begin to move their capital to foreign countries. According to the Phoenix Center for Advanced Legal and Economic Public Policy Studies, every regulator means 100 fewer jobs in the productive sector of the economy.

Relying on 50 years of data and econometric methods, the Phoenix Center estimates, “Even a small 5 percent reduction in the regulatory budget (about $2.8 billion) is estimated to result in about $75 billion in expanded private-sector GDP each year, with an increase in employment by 1.2 million jobs annually.”

Steve Forbes of Forbes magazine made similar assertions during a 2012 appearance in Durham, North Carolina. “Short term, these excessive regulations are going to be very harmful,” he said. “Taxes, regulations, binge spending by the government,” and what was then the uncertainty of the regulations that were to be imposed as a result of the new healthcare law “means in the real word ... people aren’t hiring.”

And ObamaCare presents just one more reason for businesses to feel a sense of uncertainty.

In addition to businesses, the cost of regulations severely impacts low-income families.

According to Utah State University economist Diana Thomas, the cost of regulation can absorb six to eight times as much of a poor household’s income as that of a high-income household.

The Blaze adds, “Health care works the same way. The poor are the ones who will pay the highest price, in relation to their income, under Obamacare. It’s unfair and it’s unjust, but that’s often how government works.”

In just Ohio, for example, the Department of Insurance has announced that there will be an average expected jump of 88 percent in individual-market health insurance premiums as “consumers have fewer choices and pay much higher premiums for their health insurance starting in 2014.”

That appears to be the general rule. Manhattan Institute analyst Avik Roy recently announced that premiums in California’s individual market are set to double next year.

A young childless adult living in California with an annual income as low as $21,000, far from wealthy, could be paying approximately $180 per month for a plan that currently costs approximately $70 per month, with enormous deductibles and substantial co-pays.

The Blaze reports that some of these increases are a result of the “community rating,” which prohibits insurance companies from fully taking into account differences in health when calculating pricing for health insurance of residents within geographical locations. The Society of Actuaries, however, indicates that a significant portion of the increases comes from top-down mandates of benefits that are now required of insurance plans, with those costs being foisted upon consumers in the forms of higher premiums.

Therefore, in many cases, the people that the healthcare law was intended to help are the ones being the most burdened.

The solution is to reduce the number of regulations so that healthcare services can become more affordable for everyone. In other words, get the federal government out of healthcare entirely, since the U.S. government has no constitutional authority to offer or even regulate healthcare. Healthcare should be the responsibility of private individuals, private companies, charitable organizations for the poor, or in some circumstances state and local governments. 

However, it seems unlikely that the American people will witness any reduction of federal healthcare regulations in the near future, under this administration, given its record of regulations increases.