The Washington Times - February 8, 2013, 04:44PM

There were a lot of taxes in The Affordable Care Act that Nancy Pelosi famously said “we have to pass the bill so that we can find out what’s in it.” The American Enterprise Institute has tracked some of the taxes enacted on the medical and pharmaceutical industries, and they are expected to raise billions — in the short term. However, those costs still have to be paid, and consumers are expected to shoulder many of them in 2016.

The nonpartisan Joint Committee on Taxation concluded that insurance premiums on average will rise by $350-$400 per affected family in 2016. The practical result of this will be that many companies will opt to self-insure rather than provide true insurance for employees. An expensive domino effect would then occur.


AEI’s Alex Brill writes: “If insurance companies raise premiums to cover the tax and some employers respond by self-insuring, the result will be a bigger tax on the employers that remain in the insurance market. Of course, the bigger tax would fuel another round of premium hikes, causing more employers to self-insure, further premium increases, and so on.”

In short, Obamacare is warping market forces in ways that will create an endless feedback loop, ultimately increasing costs for and applying pressure upon small businesses.