Then there are higher taxes. Apart from the “fiscal cliff” debate over whether to raise taxes on higher earners is the fact that Obamacare will, in fact, raise taxes on those same higher earners. On Jan. 1, the top brackets will face higher Medicare taxes plus a substantial tax increase on their investment income.
But it's not just the higher earners. An estimated 10 million tax filers take a deduction for unusually high medical expenses. Under Obamacare, that deduction will be limited, meaning they will pay more. Most of them fall far below the administration's definition of “wealthy.”
There are also new taxes on business. Recently, several Democratic senators -- all of whom voted for Obamacare -- asked that one of its funding mechanisms, a 2.3 percent tax on medical devices, be postponed. Sounding remarkably like a Republican, Sen. Al Franken, whose home state of Minnesota is headquarters of device-maker Medtronic, called it a “job-killing tax.”
Then there is the loss of employer-based insurance. Obamacare is designed to kill employer-based insurance by making it attractive for employers to dump workers into exchanges, which may or may not be ready in time. (Nearly two dozen states have refused to set up exchanges on their own, which will force the federal government to do it for them.) “I think companies will wait and see how the exchanges play out,” says Capretta. “But within a year or two, there will be some serious looking to see if there is an opportunity to offload some costs.”
Finally, there is Medicaid. Much of Obamacare is based on adding millions of Americans to that program for the poor. But the Supreme Court decision upholding the health care law also ruled that states, which pay for part of Medicaid, don't have to go along. Some states have already said they won't, which could lead to enormous controversy and expensive solutions as the administration struggles to provide coverage to those affected.
Together, all of this could equal one big mess. And if it is a big enough mess, it could have a significant, and decidedly negative, political effect on the Democrats who passed Obamacare and who will now put it into practice.
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