WASHINGTON, D.C. – In a speech on the Senate floor today, Sen. Orrin Hatch blasted Senate Democrats’ blueprint budget for fiscal year 2014 for failing to address the nation’s unsustainable entitlement programs; as a separate matter today, Hatch joined in legislation reintroducing the Jobs and Premium Protection Act, crafted to protect jobs and prevent skyrocketing health insurance premiums.
Criticism of the Democrats’ proposed budget
In his speech addressing the Senate, Hatch both criticized elements of the proposed budget and illuminated key omissions.
“True enough, this budget would do some pretty irresponsible things,” Hatch said. “But, the real story is what this budget doesn’t do.”
Over the next decade, the federal government will spend a combined total of $22.4 trillion, he said, on the Medicare, Medicaid and Social Security programs, asserting that these programs are the greatest drivers of the nation’s near $17 trillion debt.
“Entitlement reform is not an option, it’s a necessity. It is not a matter of politics; it is a matter of math. America’s social safety net is coming apart at the seams,” Hatch said. “And, if these programs are going to be there for future generations, they need serious, structural reforms. This isn’t new information. It isn’t privileged or classified. Anyone paying attention to our nation’s fiscal situation is aware that these challenges exist. So, what do the authors of the Senate budget propose we do about it? The answer, unfortunately, is: Nothing.”
The complete text of Hatch’s speech can be found here.
Hatch also sent a letter to President Obama last week urging him to work with Congress to find bipartisan solutions to reform the nation’s entitlement programs. In that letter he urged the president to consider his outline of five bipartisan structural reforms to the Medicare and Medicaid programs that he put forward earlier this year. Those five points, in summary, are: 1) Adjust Medicare age of eligibility from 65 to 67; 2) Modernize the Medigap Program; 3) Simplify Medicare beneficiary cost-sharing and set a catastrophic limit; 4) Increase quality and lower cost through Medicare competitive bidding; and 5) Strengthen Medicaid while improving patient care via per capita caps. Those points are laid out in detail in a Jan. 24 news release by the U.S. Senate Committee on Finance, linked here.
The letter can be found here.
Proposed Jobs and Premium Protection Act
Also on Tuesday, Hatch joined Wyoming Sen. John Barrasso in reintroduction of legislation to save jobs and prevent health insurance premiums from skyrocketing for America’s small businesses and families. According to the senator’s press statement, the Jobs and Premium Protection Act eliminates the costly, unfair and job-crushing health insurance tax included in President Obama’s health care law.
“American families and job creators can’t afford the cost or consequences of this Obamacare health insurance tax. Higher insurance costs, fewer jobs and smaller paychecks is not what President Obama promised when he signed the largest expansion of government into law nearly three years ago, but that’s exactly what’s already happening in no small part because of this tax,” Hatch said. “Raising taxes on health insurance can only ever lead to higher health care costs, because the price of the tax will be passed onto consumers. In this economy and with families and businesses struggling to succeed, it’s time we repeal this egregious tax once and for all.”
“Over the last three years, Americans and small businesses have watched their health premiums increase under the president’s health care law. Now, they’re set to get hit again unless Congress repeals the costly health insurance tax,” Barrasso said. “Ultimately, small businesses and their employees are the ones who are going to end up paying this unfair tax. Washington needs to focus on helping small businesses grow, not burdening them with new job-crushing taxes. It’s time to eliminate this bad policy that will only increase health insurance premiums for families and cost thousands of Americans their jobs.”
The Jobs and Premium Protection Act repeals Section 9010 of the President Obama’s health care law, known as the health insurance tax. If the tax is not repealed, starting in 2014, health insurance companies will be taxed based on their net premiums written in the fully insured market, where 87 percent of small businesses purchase their coverage.
Small businesses are the backbone of the American economy but, according to Hatch’s press release, this tax will directly impact their ability to create the jobs this economy desperately needs. The National Federation of Independent Business predicts that this tax will force the private sector to eliminate between 146,000 and 262,000 jobs by 2022, with 59 percent of the job losses coming from small businesses.
Families will also experience higher premiums because of this tax. A study by former CBO Director Douglas Holtz-Eakin shows the average employee with a family plan will see their take-home pay reduced by $5,000 over the next 10 years due to this tax. According to Hatch, the Joint Committee on Taxation expects that eliminating this tax would save an average family $350-$400 in 2016.
Seniors will also see their health premiums impacted by this tax. According to a study by Oliver Wyman, the tax could cost seniors $3,590 over ten years in increased premiums and reduced benefits.
Sens. Richard Burr, R-N.C., Dan Coats, R-Ind., Mike Crapo, R-Idaho, Jim Inhofe, R-Okla., Johnny Isakson, R-Ga. and Mike Johanns, R-Neb. are original cosponsors of the Jobs and Premium Protection Act.
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