Douglas Holtz-Eakin discusses a new survey on the impact of ObamaCare on large companies in this clip from Fox News. This survey of employers with five thousand employees shows that executives are planning for a sharp increase in health-care costs, mainly from new mandates in ObamaCare and the lack of control over the actual costs in providing health care. Those costs will get passed to employees in part, but it’s also likely to reduce their impulse to expand jobs in the next couple of years. The former CBO director also predicts that companies will look at shedding their retiree coverage programs, as predicted during the ObamaCare debate — and will end up pushing more people onto Medicare and Medicaid:
Some of these costs were expected, but Democrats argued that the tax breaks in the plan would offset the damage, especially for smaller businesses. The Orange County Register reports on another analysis of the bill that determined that less than half the number of small businesses predicted by ObamaCare advocates will actually qualify:
Fewer than 2 million of the nation’s 6 million companies with employees qualify for the small-business tax credits included in the new health insurance reform law, says the National Federation of Independent Business.
The law’s supporters had projected that twice as many small businesses would qualify for the tax credit. NFIB has joined a lawsuit challenging the constitutionality of the health care law.
An employer with 17 workers and an average wage of $39,000 will not qualify for a tax credit, NFIB says. Also, none of the 23 million-plus self employed Americans can get the tax credit either.
In California, only a third of the state’s employers will wind up qualifying, thanks to the high salary level in the state. That won’t do anything to boost the economy, of course, but instead will give employers more reason to give up insurance benefits altogether. Cost increases that far outstrip inflation cannot be borne without either eliminating the source of the increase, reducing compensation, or raising prices. All of those options spell trouble for California’s economy — and that of the rest of the nation.
Bloomberg also reports on the same survey Holtz-Eakin reviews (h/t DogSoldier):
Workers will pay more for their health care next year as U.S. companies prepare for provisions of the overhaul signed into law by President Barack Obama, according to a survey released today.
About 63 percent of businesses plan to make employees pay a higher percentage of their premium costs in 2011, said the Washington-based National Business Group on Health, which surveyed 72 companies that employ more than 3.7 million people. The survey showed 46 percent plan to raise the maximum level of out-of-pocket costs that workers must bear.
The companies surveyed expect their costs of health-care benefits to rise an average of 8.9 percent next year. The legislation Obama signed in March will contribute an estimated 1 percentage point to the higher expense, Helen Darling, the business group’s president, said at a press conference in Washington today. Employee-paid portions may see small increases, she said.