NCPA study finds Obamacare destroying businesses, hurting workers

Numerous reports over the years have highlighted how President Obama’s Affordable Care Act (ACA), otherwise colloquially known as Obamacare, is destroying businesses in the United States and would thus hurt millions of Americans, despite administration claims to the contrary.

A new report authored by the National Center for Policy Analysis (NCPA) found that Obamacare costs imposed on businesses will diminish hiring, employee compensation and business growth. The report’s analysis noted that employers are allocating healthcare costs on to the workforce by raising co-payments, increasing costs of dependent coverage, reducing hours and delaying hiring.

“The Affordable Care Act contains sweeping changes to the employer-sponsored health insurance market,” NCPA Senior Fellow Devon Herrick said. “Though it was promoted as a way to lessen the problems small businesses experience in providing health coverage, many business owners report that the law is increasing their burdens.”

Since close to two-thirds of Americans with health coverage is insured with their companies, a significant burden will be transferred over to businesses in order to comply with the ACA mandate. This causes the private sector to react, something that economists warned as having unintended consequences.

The NCPA study listed a number of findings in its state-specific analysis of employee health insurance for the states of California, Florida, Georgia, Maine, New York, Ohio, Texas and Wisconsin (courtesy of

“The Congressional Budget Office estimates the required coverage for individuals will cost $5,800 a year or more by 2016 — equivalent to an additional $3 per hour ‘minimum health wage.’ Family coverage could cost more than twice that amount.

“Because businesses with fewer than 50 full-time employees are exempt from the requirement to provide health insurance, those with 50 or more workers are incentivized to cut their workforces, move employees to part-time, or not offer coverage at all. The ACA’s $2,000 fine per worker for not providing health insurance is less than the cost of providing it.

“While firms were told that their health plans would be “grandfathered,” insulating them from regulation, that status is easily lost when plans change. Two-thirds to 80 percent of small-business employer plans will likely lose their grandfathered status. Large, self-insured companies and unions, however, are free to change their third-party administrators and still retain grandfathered status.

“According to a survey by Morgan Stanley, premium rates have risen substantially. Firms renewing small group insurance in 2014 saw an 11 percent premium hike. For firms with coverage through BlueCross, the premium increase was almost 16 percent.

Premium increases were much higher in some states than others. Premiums for small group policies renewing in 2014 increased 66 percent in Pennsylvania, 37 percent in California and 34 percent in Indiana. Washington saw premiums rise by an astounding 588 percent.”

Of course, a substantial amount of the damage is being inflicted upon the small business industry, particularly when it comes to premium increases. For instance, the National Federation of Independent Business (NFIB) in Wisconsin found that some businesses are expecting a 40 percent increase in premiums, while another member reported an 86 percent jump.

In the end, everyone will pay for Obamacare: the Congressional Budget Office (CBO) estimates Obamacare will cost taxpayers $1.38 trillion over the next 10 years, or $53,000 for each new person signed up under the ACA.

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