Raise the cost of something, and inevitably demand for that thing goes down. It’s a venerable principle in economics.
So five years ago when ObamaCare was being enacted, we and many others warned that its coverage mandates for employers would result in hours being cut back and workers being laid off. We were criticized at the time as Chicken Littles. Now comes a survey of 743 personnel executives by the Society of Human Resource Management, as reported by Robert King of the Washington Examiner, that shows businesses are doing just that. Nearly 14% of firms have cut part-time hours for workers, King wrote, and another 6% plan to do so.
Still worse, 5% of companies have already either cut or plan to cut the total number of workers they have, thanks to ObamaCare.
ObamaCare’s employer mandate requires businesses with 100 or more employees to provide health insurance to 70% of their workers who put in 30 or more hours a week. That goes up to 95% next year.
Meanwhile, small businesses with 50 to 99 workers will start feeling the pinch in 2016, when the mandate hits them, too.
So it’s only logical: Businesses are cutting hours to avoid having to pay for the mandate — a predictable response in the real world, but apparently not in the world of the economists, politicians and planners who concocted ObamaCare’s destructive rules.
As for “bending the cost-curve down,” as President Obama promised repeatedly, forget about it. The survey found that 77% of companies had higher health-care costs this year than last year, and just 6% saw their costs decrease. For those who had costs rise, 24% saw costs go up 16% or more.
If you want to know why this job recovery has been the worst since the Great Depression, you need look no further than these depressing statistics.
In September 2009, President Obama addressed Congress, vowing that his healthcare plan would “slow the growth of healthcare costs for our families, our businesses, and our government.” But costs for all three have actually grown.
During the campaign in 2008, Obama repeatedly said that his health reform plan would save the average family $2,500 a year in premiums. But this year, almost half of those surveyed by CBS and the New York Times characterized “the affordability of basic medical care as a hardship.” That’s a quarter more people than said so last year.
The Kaiser Family Foundation, the New York Times, and Avalere Health crunched government numbers and concluded that even premiums for coverage offered on the exchanges would rise between 2 and 5% during 2015.
Meanwhile, a study from the National Bureau of Economic Research determined that premiums in the non-group market in 2014 increased by 24.4% over what they would have cost without Obamacare.
Costs for small businesses have also grown. Last year, the average cost of employer-sponsored health insurance for an individual exceeded $5,700. That’s 23% more than in 2009, the year before Obamacare was signed into law.
One in 10 businesses has laid off workers to cope with growing healthcare costs. And “one-third of small firms say they are purposefully not growing as a result of the Affordable Care Act,” according to a National Small Business Association Survey.
Meanwhile, one in five companies has reduced employee hours to avoid falling afoul of Obamacare’s employer mandate, which requires companies with 100 or more employees who work more than 30 hours a week to provide health insurance this year. Next year, companies with 50 or more workers will be subject to the mandate.
Companies who fail to comply must pay fines of the lesser of $3,000 per employee who receives subsidies in Obamacare’s insurance exchanges or $2,000 for every worker after the first 30.
The cost of Obamacare has also grown dramatically for the government — and thus for taxpayers. In 2009, President Obama claimed that his plan would cost a little more than $900 billion over the next decade. But according to a recent report from the Congressional Budget Office, the law’s net price tag has ballooned to nearly $1.2 trillion.
The law’s ballooning cost is largely the result of its failure to slow overall health spending. Nationwide, health spending grew 5% in 2014, compared to a 3.6% increase the year prior, according to a new report from Altarum Institute. The Centers for Medicare and Medicaid Services forecast spending to grow by 6% a year from 2015 through 2023 — “largely as a result of the continued implementation of the ACA coverage expansions.”
To make matters worse, the health law has also failed to deliver “the best care, not just the most expensive care,” as the President promised in 2009. Under Obamacare, Americans now have fewer healthcare options than before.
The number of insurers selling to individual consumers in the exchanges has dropped by more than 20% compared to the year before Obamacare took effect, according to the Heritage Foundation. Consumers who buy coverage on the exchanges often find that their preferred hospitals are out of network, McKinsey & Co. reports.
Meanwhile, Deloitte surveyed 20,000 doctors and discovered that many are cutting their work hours or leaving the practice of medicine altogether. USA TODAY recently reported that many doctors are limiting their intake of patients who bought coverage on the exchanges; the reimbursement rates offered by their policies are just too low.
“Physicians who are in solo practices have to be careful not to take too many patients reimbursed at lower rates or they’re not going to be in business too long,” said the President of the Medical Society of the State of New York.
For patients, this exodus of doctors translates into less access, longer waits before appointments, and less one-on-one time with the few doctors who will see them. Last year, patients had to wait an average of 18 days for appointments with specialty doctors. This waiting game is “going to get worse and not better,” according to a study from consultancy Merritt Hawkins.
But since it “felt good” and they “had the best of intentions” and it’s all the fault of evil insurance companies the Liberal won’t hold themselves responsible for making things much worse than if they hadn’t meddled in the first place.