NY Fed finds employers are cutting jobs because of Obamacare
(This post originally appeared on The Washington Post)
This has not been a good week for Obamacare.
In what will likely result in less competition (and more upward pressure on healthcare costs) insurance giant Aetna joined United Healthcare and Humana this week by announcing it was “vastly reducing” its presence on the individual Obamacare exchanges in 2017 and ceasing to offer policies in 11 of the 15 states where it currently operates.
“Providing affordable, high-quality health care options to consumers is not possible without a balanced risk pool,” said Aetna CEO Mark Bertolini in areport from CNN.com.
The Kaiser Family Foundation is already reporting an increase in premium requests to state regulators for 2017, on average, of about 9 percent with some states requests ranging from 13 percent to 25 percent. So costs are definitely going up. And it’s having an impact on hiring.
This month’s New York Federal Reserve survey of business conditions in the Empire region (which encompasses New York and parts of Connecticut and New Jersey) asked several additional questions about the Affordable Care Act to its pool of more than 200 executives in both the manufacturing and service sectors. The results were not encouraging.
The executives who responded reported an 8.5 percent increase in healthcare costs this year and are estimating another 10 percent increase in 2017. About 60 percent of the respondents say they plan to make additional future changes to their company’s healthcare plans with more than half planning to raise their employees’ share of contributions to their company’s premium. Fifteen percent of those executives admitted they were increasing their hiring of part-timers and another 15 percent were also outsourcing more work to other firms, all because of the ACA.
More alarmingly, roughly 17 percent of service sector firms and 21 percent of manufacturers said they were reducing their number of workers in response to the healthcare act.
Of course there are many good things about the Affordable Care Act – more uninsured are being covered and more benefits are now available to those insured that were never available before. And yes, improvements are necessary and some have already been suggested by the president.
But healthcare costs continue to rise and more businesses are being forced to take steps to minimize their costs – steps that were probably not intended by lawmakers when the act originally passed back in 2010.