Is Obamacare financially burdensome for businesses?
General Reference (not clearly pro or con)
The Lewin Group, a healthcare policy research and management consulting firm, wrote in its June 8, 2010 study “Patient Protection and Affordable Care Act (PPACA): Long Term Costs for Governments, Employers, Families, and Providers,” published on the website of the Lewin Group:
“Employer health spending will decline by about $55.3 billion over the 2010 through 2019 period. Most of these savings are attributed to discontinuations of health plans. However, employer costs will generally increase after 2018. Total private employer health spending will increase by $373.5 billion over the 2020 through 2029 period.”
June 8, 2010
[Editors Note: The Patient Protection and Affordable Care Act was signed into law on Mar. 23, 2010. All references below to “current law” and “status quo” made prior to Mar. 23, 2010, refer to the circumstances prevalent before the passage of the Patient Protection and Affordable Care Act.]
PRO (yes)
Pro
Robert F. Graboyes, MSHA, PhD, Senior Healthcare Advisor at the National Federation of Independent Business, wrote in his Mar. 31, 2010 Washington Post blog entry “Health Care Rx: Not an Ending, only a Beginning,”:
“For small business, the new health-care law begins a long struggle against cost increases, uncertainty and perverse incentives. Traditionally, small business produces over two-thirds of America’s new jobs, but this bill jeopardizes that role.
Premium increases will dominate the near-term horizon… Millions of people will begin gaining insurance, with no commensurate increase in the number of doctors and other providers; this will push medical fees upwards…
Premium hikes won’t be limited to small business. Based on only one of the myriad new tax provisions, AT&T, John Deere, Caterpillar, 3M, and other companies are setting aside billions of dollars for anticipated losses. They can’t spend these dollars on jobs, products, and investment. Small businesses who sell to these companies will feel the secondary effects of this contraction…
Small business will fight every day to survive this bill.”
Mar. 31, 2010
Pro
Orrin G. Hatch, JD, US Senator (R-UT), stated in a June 17, 2010 press release titled “Hatch Introduces Legislation Repealing Health Law’s Liberty-Threatening Individual Mandate, Job-Killing Employer Mandate,” publised on the website of the US Senate:
“…[T]he job killing employer mandate [in the Patient Protection and Affordable Care Act] ‘would force more layoffs and increase taxes on businesses at a time of near 10 percent unemployment’…
[P]rovisions in the health law forc[e] employers to provide health insurance for their employees or face a massive tax increase that the nonpartisan Congressional Budget Office (CBO) found would hit employers with $52 billion in new taxes. Almost every group representing employers, including the National Federation of Independent Business (NFIB), the U.S. Chamber of Commerce, and the National Association of Manufacturers (NAM), opposes the employer mandate.‘The employer mandate would force businesses to let people go or raise the cost of doing business to such an extent that they don’t start hiring.'”
June 17, 2010
Pro
John Ligon, MA, MPA, Policy Analyst at Heritage Foundation’s Center for Data Analysis, wrote in an Apr. 27, 2010 webmemo titled “Obamacare: Impact on Businesses,” published on the website of the Heritage Foundation:
“The new health care law will impose new compliance regulations, employer mandate taxes, taxes on business ‘flow-through’ and investment income, and numerous indirect costs on small and medium-size companies. Altogether, these constraints will dramatically affect companies’ per-employee costs, firm-level allocation of labor, desire to take on health coverage, and motivation to grow both in terms of income and employment…
[C]hanges will likely produce upward pressure on health insurance premiums in the ‘fully insured market’… Instead of adding more regular full-time employees, some businesses will simply increase hours for current employees, hire low-skilled and low-income labor, or opt for more temporary or seasonal workers…Obamacare fails to appropriately address the concerns of small- and medium-size businesses relating to health care reform, and it will force many companies to react to new cost burdens.”
Apr. 27, 2010
Pro
The US Chamber of Commerce, wrote in its Apr. 26, 2010 white paper “Critical Employer Issues in the Patient and Protection and Affordable Care Act,” published on the website of the US Chamber of Commerce:
“The basic premise of the law fundamentally shifts the foundation of employer-sponsored benefits in America. What has been a voluntary and flexible system will now be a one-size-fits-some landscape. Employers will be required to offer health benefits or face a penalty… Without adequate incentives to address steeply rising medical costs, insurance is likely to become more expensive. Because of the mandatory nature of the law, employers may find it more difficult to offer affordable coverage, may become competitively disadvantaged, and may drop coverage altogether in an effort to stay in business.”
Apr. 26, 2010
CON (no)
Con
The Congressional Budget Office wrote in its Nov. 30, 2009 report “An Analysis of Health Insurance Premiums under the Patient Protection and Affordable Care Act,” published on the website of the Congressional Budget Office:
“In the small group market, which is defined in this analysis as consisting of employers with 50 or fewer workers, the Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT) estimate that the change in the average premium per person resulting from the legislation could range from an increase of 1 percent to a reduction of 2 percent in 2016 (relative to current law). In the large group market, which is defined here as consisting of employers with more than 50 workers, the legislation would yield an average premium per person that is zero to 3 percent lower in 2016 (relative to current law)…
Those figures do not include the effects of the small business tax credit on the cost of purchasing insurance. A relatively small share (about 12 percent) of people with coverage in the small group market would benefit from that credit in 2016. For those people, the cost of insurance under the proposal would be about 8 percent to 11 percent lower, on average, compared with that cost under current law.”
[Editors Note:In March 2010, President Obama signed the Patient Protection and Affordable Care Act (HR 3590), the Health Care and Education Reconciliation Act of 2010 (HR 4872), and Executive Order 13535 which restricted federal funds from being used for abortion services. Pro, Con, or Not Clearly Pro or Con positions made prior to the final wording of these three elements of the health care reform legislation may have changed since March 2010.] Nov. 30, 2009 - An Analysis of Health Insurance Premiums under the Patient Protection and Affordable Care Act
Con
Kathleen Sebelius, MPA, US Secretary of Health and Human Services, released the following information in a Dec. 3, 2009 fact sheet titled “New CBO Analysis Confirms Benefits of Health Insurance Reform for Businesses,” published on the website of the US Department of Health and Human Services:
“American businesses know the health care status quo is unacceptable… Small businesses in particular struggle under the current health care system… If we do nothing, over the next ten years, health care costs for large businesses are projected to reach $28,530 per employee, a 116 percent increase from 2009…
Under current law, the Congressional Budget Office (CBO) estimates premiums to be $7,800 for single policies and $19,300 for families in the small group market.
Small businesses that opt for comparable coverage under reform could save up to $390 for single policies and $965 for family policies. Assuming all 25 million people insured through small business save at least $390 (more for families), this will yield nearly $10 billion in savings [for small businesses] in 2016 alone…
CBO estimates that, under reform, large business premiums will drop by $100 per single policy and $200 per family policy. With 134 million people enrolled in such coverage, this translates into at least $13.4 billion in savings [for large businesses] in 2016 alone.”
[Editors Note:In March 2010, President Obama signed the Patient Protection and Affordable Care Act (HR 3590), the Health Care and Education Reconciliation Act of 2010 (HR 4872), and Executive Order 13535 which restricted federal funds from being used for abortion services. Pro, Con, or Not Clearly Pro or Con positions made prior to the final wording of these three elements of the health care reform legislation may have changed since March 2010.] Dec. 3, 2009
Con
Gary Locke, JD, US Secretary of Commerce, wrote in his Apr. 1, 2010 opinion article “Dont Believe the Writedown Hype,” published by the Wall Street Journal:
“[E]very serious health-care analyst agrees: The status quo was completely unsustainable for American businesses…
The Business Roundtable [2009] study said that if current cost trends continued through 2019, the total cost of employer and employee premiums and out-of-pocket expenses would be 166% higher than it is today.
That would either force companies to decrease or eliminate employee health insurance benefits or subject them to back-breaking costs that would make them less competitive in the global marketplace.
The bill President Obama signed into law… helps avoid each of these equally unappealing options.
[I]n the long run, the health insurance reform law promises to cut health-care costs for U.S. businesses, not expand them.” Apr. 1, 2010
Con
HealthCare.gov, a federal government website managed by the US Department of Health and Human Services, provided the following statement on its General Information page for Large Employers (accessed Aug. 2, 2010):
“Since 2000, employer premiums have doubled… The Affordable Care Act tackles waste, fraud, and abuse and other drivers of health care costs, which will provide employers significant savings in the cost of employee care.”
Aug. 2, 2010
