While reports frequently blast President Obama’s health care law for costing way too much, a lot of Herman Cain show listeners have been asking how ObamaCare will specifically affect their own job. It’s a good question. Unfortunately, it has an expensive answer.
The Heritage Foundation has compiled several comprehensive research papers that summarize the impact Obamacare will have on workers and employers. Included below is a summary of their research on how Obamacare will personally impact Americans.
OBAMACARE’S IMPACT ON EMPLOYERS
1. Employer mandate. Under the new health care law, all businesses with 50 or more full-time employees are required to provide health coverage for their workers or pay a $2,000 penalty for each employee after the first 30 workers. According to the Heritage Foundation, the employer mandate creates incentives for businesses to avoid higher costs by, for example, hiring part-time employees instead of full-time employees, since businesses will not be penalized for failing to provide health insurance to part-time employees. The cost to an employer of hiring a full-time worker increases to at least $10.03 per hour and for those with family health coverage, it is at least $13.75 an hour.
2. New taxes and regulations. The health care law will hit employers with several new taxes. The Heritage Foundation said one particularly damaging tax will be the 2.3 percent excise tax on medical devices. This tax could result in job losses in excess of 43,000 and employment compensation losses in excess of $3.5 billion. Obamacare also applies the Medicare payroll tax to high earners’ investment income, including capital gains. Taxing capital reduces economic growth and investment. These additional costs reduce the ability to hire workers and could even prompt layoffs.
3. Future costs and regulations are unpredictable. Recent studies have found that roughly one third of business owners cited new requirements in Obamacare as either the biggest or second-biggest obstacle to hiring. In addition, Dennis Lockhart, the president of the Federal Reserve Bank of Atlanta, said, “We have frequently heard strong comments to the effect of ‘My company won’t hire a single additional worker until we know what health insurance costs are going to be.’”
OBAMACARE’S IMPACT ON EMPLOYEES
1. Two-thirds of American employees’ wages will decrease as employers deal with increasing costs. The Heritage Foundation cited a recent study by the Urban Institute claimed that said mid-size firms will see spending per person increase by 4.6 percent, while large firms will see spending increases by 0.3 percent per person. According to the U.S. Census, more than 60 percent of employees are employed by medium- or large-size firms. The study suggests: ‘Any increase in employers’ health-related costs will be offset by decreases in other compensation—whether wages or other benefits.’ This means that individuals in mid- and large-size firms will receive less in take-home wages and pay a greater proportion of their compensation to health care due to Obamacare.”
2. Loss of existing insurance coverage. Because of Obamacare’s high costs, experts predict that employers will stop offering employees health coverage, forcing employees into the new government-run exchanges. The American Action Forum estimates that, under Obamacare, 35 million Americans will lose employer-sponsored health care coverage.
3. Premiums in the individual market are set to skyrocket. Obamacare’s new insurance rules and regulations will have dire effects on the cost of coverage that individuals and small businesses purchase on their own. Many consulting firms are predicting that individual health care premiums will rise by 50%, with some nearly doubling.
4. Full-time workers turned part-time to avoid the employer mandate. Businesses have already begun limiting the hours their employees can work, turning full-time workers into part-time workers, to avoid paying the employer mandate penalty or providing costly insurance coverage.
5. The heavy burden of 18 taxes and penalties. Obamacare imposes 18 new taxes and penalties that will cost Americans over $836 billion between 2013 and 2022. Most Americans will be required to hold nominal health insurance coverage or pay a fine of $95. That figure will rise quickly over the next two years to $350 in 2015 and $750 in 2016. However, there are some exceptions for religion and low income where you won't be required to pay the penalty.