The announcement scheduled for later this month that seniors can expect about a 2.8% cost of living (COLA) increase in their social security (following 2018 2% increase) is another indication that the Obama era practice of diverting funds meant for older Americans to other groups is coming to an end.
Since the regular program of Cost of Living increases began in 1975, (prior to that increases were provided by legislation) there has never been a period when such adjustments were lower than they were under President Obama. Not once had there been a year in which there was no increase at all. Since 2009, two consecutive years, 2009 and 2010, provided no adjustments, and there was also no adjustment in 2015. Before 2009, the average annual increase was 4.4%; during the Obama presidency, it was 1.7%.
But Social Security was only one area in which seniors were detrimentally affected. In 2012, Americans for Tax reform performed an analysis of the 20 new or higher taxes resulting from Obamacare, and pointed out the five that most directly harmed seniors:
Individual Mandate excise tax penalty. Many seniors face a coverage gap between retirement and Medicare eligibility. Obamacare raised taxes on these younger seniors by punishing them if they don’t purchase “qualifying health insurance.
“Cadillac Plan” excise tax. Obamacare imposed a 40% excise tax on high-cost (“Cadillac plan”) health insurance plans. Seniors often face higher costs in health insurance premiums due to chronic health conditions and other risk factors. This tax is almost exclusively a tax which will fall on seniors with the greatest health insurance needs.
Dividends tax hike, the top tax rate on dividends was increased 15% today to 39.6%. In addition, Obamacare imposes a dividend “surtax” of 3.8% on families making more than $250,000 per year.
Medical device excise tax. Obamacare imposed a new excise tax on medical device manufacturers.
Reduce allowable medical itemized deductions. Medical itemized deductions previously could be claimed on tax returns, but they must be reduced by 7.5% of adjusted gross income. Obamacare increased this “haircut” to 10% of AGI in 2013.
An Investors study noted that “One of the most important sources of funds that are being used to pay for ObamaCare comes from cuts in future Medicare spending. In 2016 Investors also study npointed out that “A letter issued by the Medicare Office of the Actuaries at the time ObamaCare became law warned that Medicare fees paid to doctors and hospitals will fall increasingly behind what other payers will be paying in future years – threatening access to care. That warning was repeated in the latest Medicare Trustees report, which warns that by 2040 half of all hospitals, 70% of all skilled nursing homes and 90% of home health care services will not be able to survive under Medicare’s increasingly skimpy fees.”
The Galen Organization summarized Obamacare’s impact on Medicare:
“ObamaCare doesn’t modernize the program or improve it for seniors. ObamaCare’s solutions are detrimental to today’s seniors:
- The law takes $716 billion out of Medicare over 10 years to help fund a huge expansion of taxpayer subsidies for health coverage.
- It creates an unelected, unaccountable board — the Independent Payment Advisory Board — with powers to limit payment and access to health care for seniors and which will become Medicare’s rationing board. ObamaCare drives your doctors and hospitals out of Medicare
- The law makes deep cuts in payments to physicians treating Medicare patients.
- Cuts to Medicare providers mean it will be harder for seniors to find doctors and hospitals to treat them.
- Doctors are already threatening to drop out of the program in large numbers if the payment cuts go into effect.
- Medicare actuaries predict that more than 40% of Medicare providers eventually will either go out of business or stop seeing Medicare patients altogether if the law’s cuts take effect.”
Under the Trump Administration, The deficient Social Security COLA’s have been addressed, and tax reform has eased some burdens.
Frank Vernuccio serves as editor-in-chief of the New York Analysis of Policy and Government.