April 3 2014
Report: ObamaCare to Costs Companies Hundreds of Billions
ObamaCare’s impacts continue to ripple across the private sector. The Administration has denied that the healthcare law will have an impact on business practices, but the latest report from a national health advocacy group demonstrates that health care costs for large American businesses have spiked because of ObamaCare. These businesses will have to make difficult choices that will no doubt harm American workers.
As we’ve reported through a number of stories, American workers have been and will continue to be harmed by the un-Affordable Care Act through pay cuts, lower working hours, layoffs, forgone job opportunities, and even lost coverage. (Check out some of the stories here.)
This week the American Health Policy Institute released findings from a survey of companies with 10,000 workers or more. They expect to incur between $4,800 and $5,900 more per employee and add hundreds of millions to their overhead from ObamaCare. This confirms that indeed ObamaCare is costly and is forcing private sector companies to make difficult business decisions to remain viable.
Here’s more from the survey:
· The cost of the ACA to large U.S. employers (10,000 or more employees) is estimated to be between $4,800 to $5,900 per employee.
· These large employers will see overall ACA-related cost hikes of between $163 million and $200 million per employer, or an increase of 4.3 percent in 2016 and 8.4 percent in 2023 over and above what they would otherwise be spending.
· The total cost of the ACA to all large U.S. employers over the next ten years is estimated to be from $151 billion to $186 billion
There will be differences of opinion as to the significance of these costs. Some will say that they are welcome and will lead to more economical use of health care dollars. Others will say that this portends the end of the employer - sponsored health care system. What we do know is that the large employers themselves—companies that provide more than 52 million jobs—see these costs coming.
Cost increases in the range of $163 million to $200 million per large employer over the course of a decade will not be overlooked by CEOs, CFOs, or Boards of Directors. It is not yet clear what these changes will be. What is clear, however, is that the ACA has already altered the landscape of employer-provided health care, and will do so even more over the next decade
Employers now have a significant incentive to make fundamental changes to what healthcare coverage they provide workers. That is no surprise. What we don’t know is just what those changes will look like, but we do have some insights based on the actions other companies have taken such as cutting hours for part-time workers, forgoing hiring, avoiding new investments, and more. Unfortunately, millions of workers may also lose their employer-sponsored health insurance entirely. That means potentially a whole new slew of Americans would find themselves uninsured thanks to ObamaCare.
The likely response from the Administration and ObamaCare supporters will be to deny and demonize. That’s no response to people who can no longer count on coverage from their employers and will have to secure coverage on their own or brave the world of ObamaCare exchanges.