RUSH: Here's Tracy in Bedford, Indiana, next up on Open Line Friday. Hi.
CALLER: Hey, Rush, thank you so much for taking my call.
RUSH: You bet.
CALLER: Listen. I wanted to let you know that Obamacare hit our school system this week. I'm a Title I teaching assistant in the public school system here and it affects, I don't know, maybe eight elementary schools, three middle schools, and the high school. What they have done is, first of all, the IRS is apparently overseeing Obamacare in Indiana. I guess everywhere maybe. I don't know. But they've reclassified full time from 32 down to 30 hours. So what the school system has done is the whole entire support staff has been cut to 28 hours so they will not have to offer us healthcare. That affects teachers assistants, room aides, cafeteria workers, coaches.
RUSH: Now, Tracy.
RUSH: My guess is that you knew this before it happened, but you're talking about people who didn't know it, who are now surprised by it?
CALLER: Oh, my gosh. People were blindsided, a lot of them. They are fit to be tied.
RUSH: Right, but here's the question: Who are they blaming? The school system I'll bet.
CALLER: The school system is blaming the federal government.
RUSH: But are the employees blaming the federal government or are they blaming the school system?
CALLER: Both. Some are blaming the school system; most are blaming the federal government.
RUSH: Most are blaming the federal government, really?
CALLER: Yes. Oh, yes. In fact, one lady in our meeting that we had Wednesday when we were given this news that we were all being cut to 28 hours
CALLER: so we would not have to be offered healthcare, got up and preached about, "People, you have to know what you are voting for." And the whole room erupted in cheers.
RUSH: Let me tell you what's next for these people. If they lose their employer provided health care, they are faced with one of two things. They are either going to have to pay a fine for not having health insurance, and the IRS will find them, or they are going to have to visit a state exchange.
CALLER: They told us that.
RUSH: That's right. They are going to have to find a state exchange in Indiana, and wait until they do that. Wait until they find out what's in store for them there.
CALLER: Well, they told us that.
RUSH: And wait until they find out what it's going to cost. The Wall Street Journal has a story out today on health insurers warning on premiums next year. They are going to double. Do you remember, not just you, Tracy, all of you in the audience, do you remember the balloon mortgages as part of the subprime mortgage mess. They suckered in a bunch of gullible home buyers with an adjustable rate mortgage but it was very, very low and nobody ever thought the rate was going to go up, but they ballooned. The mortgages ballooned. It ended up being called balloon mortgages. And we're now being faced if you're having trouble understanding it but you know what a balloon mortgage is with balloon health care. That's what this is adding up to.
CALLER: Well, listen to this. I work at the school, I'm paid by the school, but I also do a job for the school system as a volunteer. I'm a newspaper sponsor. I can't even do that. The kids are losing that extracurricular activity because I can't even give the appearance that I am putting in more than 28 hours at the school. So not only am I losing paid hours, they're even dictating what I can do as a volunteer.
RUSH: Exactly, as a volunteer. And that's key. You can't even volunteer because of the appearance. And look who's getting hurt with it. The children.
RUSH: The Wall Street Journal with a story today.
The nation's big health insurers -- Aetna, for example -- say that they expect health insurance premium, the cost for coverage, to rise or even double. Now get this, folks. Health insurance prices are going "to rise from twenty to 100% for millions of people" starting in January. Yes, 2014's really the year where everything in Obamacare gets implemented. It doesn't fully vest or fully implement, but 2014 is when what has yet to happen begins to, and it's very important. So keep this in mind now. So the insurance companies are saying that their premiums are going to go up anywhere from twenty to 100% for millions of people as a result of Obamacare being implemented.
"Mark Bertolini, CEO of Aetna Inc., one of the nation's largest insurers, calls the price hikes 'premium rate shock.' 'We've done all the math, we've shared it with all the regulators, we've shared it with all the people in Washington that need to see it, and I think it's a big concern,' Bertolini said during the company's annual meeting with investors in December." Most people have no idea, particularly the low-information voters.
Now, you and I are blue in the face for about three years now trying to tell people what's going to happen, but it's tough to get people to listen. Certain doom-and-gloom predictions, people don't want to hear. Particularly if they're about Obama. They don't want to hear bad things about Obama. They don't want to confront that. So this "balloon health care" analogy to balloon mortgages, I think you might want to give this a shot. For three years, we have heard nothing but all the sweet stuff.
We have heard nobody can be refused insurance, right? We have heard, "You get covered FOR FREE, even if you have a preexisting condition! If you like your doctor, you can keep your doctor. If you like your plan, you can keep your plan. Your kids can stay on your policy until they are 26. Millions and millions more Americans will be getting affordable health care. We're such good people! Your rates will not go up."
In fact, not only will your rates not go up, "The average premium," Obama said, "will go down $2500 -- and, of course, you'll be able to keep your provider and your insurer." This is what people have heard. Like it or not, people, particularly the low-information voters who don't pay attention to politics but very infrequently during election years. They do hear the president say things when he makes speeches or they catch him on TV, and I'm telling you: Most people believe what their president tells them.
It's very frustrating for us who know how this guy, and Clinton, are such strangers to the truth, but the fact is, it's one thing we have to recognize: Most people believe their president. Obama has assured people that nobody can be refused insurance. Kids get to stay on their parents' policies until they're twenty-xi. Millions and millions more Americans are going to get health care. It isn't going to cost anybody but millionaires any money. The rich are going to be paying for it all! Your rates aren't going to go up.
In fact, your rates are going to go down, and you keep your doctor and you keep your plan if you like it. Everything's hunky-dory, except it isn't when it starts to happen. It's just like when people bought into the subprime mortgage market and they were sold ARNs, Adjustable Rate Mortgages. They were sucked in with very, very low interest rates -- and then magically, unpredictably (ahem) their rates started going up and they could no longer afford the mortgage. Well, our caller from Indiana, and you and I, have known for three years that any company with less than thirty full-time employees is not subject to Obamacare.
Not to start.
You and I have known that companies are going to fire people or lay them off or re-categorize them to part time and give them fewer hours so that they don't qualify as full time. So they're going to get under the 30 hours a week, the employees that would qualify. It's starting to happen. But these people don't know why. They've been expecting free health care. Doctor and policy, they get to keep if they like them. They don't know about all this stuff happening!
So when it starts happening... That's why I asked her: "Who are they blaming, the school or the federal government?" Because you remember Bernie Marcus, the co-founder of Home Depot. When the payroll tax holiday ended and people's paychecks, their take-home pay got smaller in January, he said that a lot of business owners that he knows, their employees blamed the employer. Not the government. But the employer didn't raise anybody's taxes.
So that's why I asked her, "Are they mad at the school district or at the federal government." She said most of them are mad at the federal government. But anyway, what Obama has done here, what the Democrats have done, is they've hooked everybody in the low-information crowd on this. I'm talking about the 40, 45% who support it. They are the ones that have no idea what's coming, until it affects them. Then after they get pushed out of their coverage, they begin to lose it.
As a school district or any other employer downsizes, it lays people off and reduces hours so they don't have to provide coverage for everybody again. It's so predictable. These people that lose their insurance are now going to have to find their way to a state exchange, and wait until they do that -- and then wait until they find out there's a fine if they don't. This is why, by the way, none of this stuff implements until 2014, long after Obama's been reelected.
No matter how mad people get at him, it won't matter because he's not up for reelection again, supposedly. Even the New York Times today, folks, has a story about a bakery that is going to lose more than half of its profits because of Obamacare. The story is not angry at the bakery, amazingly so. I am not kidding. The New York Times has a story about this little mom-and-pop bakery that's going to lose more than half of its profits by complying with Obamacare.
Let me put it this way: It's going to lose half of its profits if it complies. They are obviously going to take steps to do just the bare minimum compliance so as not to lose more than half their profits, because that's the reason to stay in business is profits. If you start losing your profit, you lose your reason to stay open. I'm telling you, there are 40% or 45% -- maybe half the country, 50% -- is clueless about what's headed their way, and that's why this stuff didn't implement the day it was signed into law.
RUSH: There's a New York Times story on health care. There's two or three of these stories today, Wall Street Journal, New York Times, all about what's coming in 2014. I have to say as an aside, everybody in the news business writing these stories knew three years ago this was going to happen. They're writing these stories as though this is newly discovered information. But everybody knew, because there were debates about this within the media. I know there's some ignorance and some willing blindness in the media, but for the most part with exceptions, they knew. Everything in this health care plan that was reason to oppose it, they knew it.
So all these stories that are appearing, like today there's a bunch of them, on all the surprises coming in Obamacare, they knew. Such as, do you realize that companies, what is it, with fewer than 50 employees or with employees who work 30 hours a week or less, don't have to provide health insurance for their employees. Did you know that? This has been known since before the bill was signed into law. It has been known certainly since the bill was signed into law. The trades knew it, businesses knew it, health insurance companies knew it, the media knew it. Everybody knew it. It's just being reported today as though it's been discovered just today, or yesterday.
So the stories are appearing, and on the insurance side there's a Wall Street Journal story and another publication about how premiums are going to go up anywhere from 20 to 100% next year, starting in January. The New York Times has a story about a bakery that, after Obamacare fully implements, will eat up over half of its profit, just a single bakery. And here are the numbers of this bakery in the New York Times story.
The premiums to cover their employees will cost $108,000 more a year than what they're paying now. Stop and think of that, $108,000 additional dollars they've got to come up with in January to comply with Obamacare. Their profit, according to the New York Times, the bakery profit is $200,000 a year. So on one hand what they make every year on average, a couple hundred grand, starting in January their health care insurance costs go up $108,000. So over half of their profit gone to comply with Obamacare.
Now, they could opt to pay the fine. It's a little different for individuals choosing to pay the fine, if you're not covered by an employer plan, your fine will be much less than the price of a policy. But that isn't true for a business. Because they have a lot of employees if they choose to pay the fines for each employee instead of coverage, it still adds up. In the case of this bakery in the New York Times, if they opted to go the fine route, $130,000 additional, which is even worse. Or the third option that they have is to fire a number of employees to get below the 50 employee threshold and in so doing, maintain their profit and keep their business.
So there's three options this bakery has that wouldn't exist were it not for Obamacare. Obamacare, full implementation means this bakery can't stay in business for very long, not when its profit is 200 grand, its health care expenses are an additional $108,000 or a fine for not providing the coverage is $130,000. Third option: Fire a bunch of people, get under the 50 employee limit and not be subject to Obamacare.
What do you think they're going to do? My guess is they're going to choose Door Number 3, and you know what? They're going to hate it. Because contrary to what most people think, most businesses do not hate their employees, particularly small businesses. Most small businesses appreciate, really appreciate their employees. Small businesses couldn't get by without them. There is no free time in a small business. But they're probably going to choose Door Number 3 because that door keeps them in business, but they gotta lay off a lot of people. They are going to cause economic distress for a lot of people.
None of it would happen were it not for Obamacare. And I'm sure the people at the bakery, having convinced the New York Times the truth of this, will tell their employees the truth, and the employees of this bakery will know that it's not the bakery laying them off. It's not the bakery being a bunch of cheapskates. It's the federal government and its mandate and this entitlement that's making it cost prohibitive to stay in business. And in the process what's going to end up being proved here is that the purpose of a business is not to provide jobs and health care for people, contrary to what many low information voters believe.
The purpose of a business is to provide people jobs in health care. No, it's not, and this instance is going to prove it. The bakery now has 95 employees. They would have to fire almost half of their employees to get under the 50 employee threshold. So now the question becomes, will they even be able to stay in business with just half of their workforce? Will they be able to maintain the same level of business? Will they be able to bake as much, produce as much, output as much if they get rid of about half their workforce? So even if they do that, their business is going to shrink and then the profit is going to shrink because their sales are going to shrink.
Now, what's most amazing about this is the New York Times tells the truth about this situation. This is not a story ripping the bakery, the ownership, the management, none of that. It's not sympathetic, either, but it is pretty much informative, and this is what's in store for so many businesses. And as I say, the New York Times knew this three years ago. Everybody reporting this story today knew that this was coming, but they didn't dare tell anybody before an election.
They didn't dare tell anybody during the time health care was being debated. They didn't dare put this information out. And people who made these claims, people who had read Obamacare and were trying to tell people that this was what's in the bill were called scare mongers and extremists and people that just had it in for Obama and no matter what he does, they are not going to agree with it, that kind of take. So the people that were telling people the truth about this or reporting it were impugned and criticized and ridiculed.
In fact, it was even worse. They were selling Obamacare as a way to save small business. Because that's what Obama was doing. Obama was saying it's going to lower the deficit. It's going to expand health insurance and treatment. It's going to lower costs. It's going to bring down the deficit. None of it was true, and everybody that was passing on what Obama was saying knew what he was saying wasn't true. But since their job any longer is not to be suspicious or questioning of what people in power say, it's simply to convey it, we're going to come to January of next year and there is going to be a literal explosion from people who have no clue any of this is coming.
And when it hits, they are not going to know who to blame. They are going to blame the business probably. They are going to blame the insurance company. You know that's going to happen. You know the insurance company's going to take the main hit on that. And the media will be right in there promoting that, even though they are today reporting the insurance companies have no choice. So Obamacare sold as a way to save small business, lower the deficit. None of it was true.
Plus, folks, it's going to be so complicated and so inexplicable that it may well be -- and I'm not predicting this. It may well be that this thing is so complicated, so filled with dead weight, it may be bureaucratically impossible to fully implement this thing. Let me ask you a question. I watched a fascinating show the other night. The BBC produced a 90-minute minidoc, docudrama (I think it starred William Hurt), about the presidential commission investigating the explosion of the space shuttle Challenger, and it was fascinating.
There was nothing in it that we don't now know, but the program has not aired in this country. There was an attempt to cover up what really happened. To boil it down to its essence, there was testing data that said, "Do not launch below 40 degrees or 50 degrees," whatever it was. It was 32 or 28 when they launched. "Do not launch because the O-rings in the solid rocket boosters become brittle. They will not expand to fill gaps. As the material in the solid rocket boosters expand, the gaps will not be filled, gas will escape, and an explosion will happen."
There were people at Morton-Thiokol Inc. who had told NASA this, but NASA had convinced the government to drop the Air Force from launching spy satellites. NASA said, "We'll do it for you. You pay us. This will justify the shuttle program. We'll guarantee you two launches a month, and we'll get all your secret spy satellites up there." The reason why they tried to cover it up was (remember this is in the middle of the Cold War), they didn't want to dare admit to the Soviets that we couldn't launch anything.
We couldn't launch a rocket of any kind below 40 degrees. They just couldn't have that information come out. Well anyway, it was brought up. It did get brought out during public hearings, thanks to a physicist named Richard Feynman. He is the lead character in the docudrama. Now, I just took the time to explain what it's about. It's not relevant to what I'm talking about. At one point, Feynman and an Air Force general ally of his who's trying to steer him to the truth, is also on the commission.
But he can't say so because his source for the O-ring problem was Sally Ride, the astronaut. But she had to be protected too. So they were desperately trying to get Feynman steered into the right direction. They knew what the problem was, but they needed an independent member of the commission to find it and make it public. So they take him to the Pentagon, and something struck me. I don't know why, but they're driving in the Pentagon.
"It's a massive building, and I started asking myself: "I wonder if there's one person who knows everything going on in the Pentagon at any given moment." I said to myself, "That's not possible." The Pentagon's the Department of Defense, but there's not one person who knows everything going on in there. I don't mean that rogue things are going on in there. I mean there's so much happening. All the military branches are in there. All the secret stuff is in there. There are five different rings, all kinds of different levels of security. It's impossible for any one person to know it all.
Even the Secretary of Defense does not know. I once asked a former CIA director, "Does the director of Central Intelligence know everything going on at the CIA?" He says, "No way." Well, my point is, I'm telling you this Obamacare is so massive, there isn't going to be one person who will be able to tell you what should happen and what shouldn't happen, or what's legal and what isn't legal. It's too massive, it's too complicated, it leaves too much open-ended. There are already 800 new pages of regulations that got written in one day a couple of weeks ago.
That's how open-ended this is. There's nobody that can really tell you how this is going to manifest itself, and my point is it's going to end up being so big and so unwieldy that it may be impossible to fully implement. But the danger there is this: In that circumstance, some out-of-control bureaucrat can just do anything with it -- which is the problem, one of many, of letting the federal government have control over something like this. Now, the free market is the best place to take care of this, but it's been aced out.
So I'm telling you, folks: There's going to be hell to pay starting next January, in ways that we cannot even imagine.