Wednesday, August 3, 2011

Obamacare’s Effects: Rising Premiums, Fewer Jobs

A study of employers released by Mercer yesterday yielded interesting results about the health care law.  More than a quarter of employer respondents said their costs would rise by at least 3% in 2014 thanks to Obamacare’s new mandates and requirements – 15% said the increase would be more than 5%, and a further 13% said their costs would rise by about 3-4%.  And a further 29% haven’t yet calculated how much the law will increase their firms’ costs, meaning the numbers cited above likely will rise in future surveys.  That Obamacare will raise premium costs for businesses – even though candidate Obama repeatedly promised that premiums would go DOWN by an average $2,500 per family – shows once again how the law is not meeting its promises.

Worse yet, the Mercer survey also reveals one way in which the law will REDUCE jobs for the American economy, rather than creating the 4,000,000 jobs that then-Speaker Pelosi promised.  The survey found that more than a quarter of firm respondents (28%) currently cannot afford to provide coverage to some or all of their part-time workers who work more than 30 hours per week, as Obamacare requires.  And how do these affected firms plan to respond to Obamacare’s new mandate to provide insurance to all employees working more than 30 hours per week?  Half (50%) plan to “change their workforce strategy” so that fewer workers work more than the 30 hours per week that triggers the new Obamacare requirements.  That means fewer opportunities for individuals to work more hours they need to get ahead in this struggling economy.

One small business owner testified before Congress last week about the way in which Obamacare is distorting economic decision-making for businesses, discouraging them from hiring new workers and encouraging them to lay off existing ones:

Up until the passage of health reform, our plan had been that after October 2011 (this October), my wife and I would have entirely paid off the debt on our business for that purchase.  We have long anticipated and planned for the day when we could spend the money we were using to pay off this debt to expand our business and branch out further.  For my entire career, I have been working to become financially independent but now I face a very uncertain future.  I fear that everything I’ve worked for will be for naught.

The new health care law has wrecked our plans to grow our business and create jobs.  We are already taking steps to downsize our team in anticipation of the full weight of the law’s burden which will affect me most heavily in 2014.  My new focus, unfortunately, is on how to have the leanest workforce possible and, even more dismaying, my worries about the very survival of our business are emblematic of the reactions of millions of small businesses throughout our nation.  I cannot imagine that this is what the President and Congress intended, particularly as they continue to try to pull our country out of a recession and reduce the unemployment rate.  But intentions aside, it is the reality that they have created for us; it is the reality facing the very entrepreneurs that our nation needs to create the jobs to get our economy back on track.

Ironically enough, at his press conference regarding the debt ceiling yesterday President Obama asked “What are we going to do for the single mom who’s seen her hours cut back…?”  Based on the Mercer survey, and the testimony noted above, one of the best things we could do to get that single mom more hours would be to repeal Obamacare, and particularly its destructive mandates on business.