NY Fed: Obamacare Is Boosting Businesses’ Health Costs
Obamacare is increasing the cost of providing health insurance to workers, according to a report released Monday by the Federal Reserve Bank of New York.
A majority of businesses surveyed by the New York Fed expect the health-care law to increase the cost of their coverage, and the median respondent estimates a boost by 10 percent in 2015. The report is based on two separate surveys of service and manufacturing companies.
Last year, the New York Fed saw a similar increase in health care costs; this year, though, an even larger majority of companies this year cited Obamacare as the driving force behind the increases.
That means for New York state, much of northern New Jersey, part of Connecticut, Puerto Rico and the Virgin Islands, businesses, workers and customers are all going to be hit by increased costs due to the health-care law.
The “vast majority” of companies surveyed said they’re being charged a higher monthly premium for each of their employees, and many of them said they’re passing some or all of that increase onto their employees. Businesses are also dealing with higher costs by charging higher deductibles, co-pays and out-of-pocket maximums. Just over a third of companies said they weren’t making changes to their health plans as a result of Obamacare.
Changes are happening everywhere: 20 percent of businesses said they were either cutting employees or increasing their share of part-timers because of Obamacare. About the same amount said they were paying their employees less due to the health-care law, or outsourcing instead of hiring more workers.
The problems aren’t just going to hit employees either: 36 percent of manufacturers and 25 percent of service companies reported upping their prices because of Obamacare as well. About half of all companies said they weren’t making such changes, however.
Employers have long been expecting the Affordable Care Act to increase the cost of providing health coverage to workers. One analysis found that the many taxes included in Obamacare will add an average of $196 a person to premiums for employer sponsored plans this year alone. (RELATED: Obamacare Taxes Add Billions To Rising Premiums)
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