House Education & Workforce Committee
Report: 300,000 Small Business Jobs Lost Due to Obamacare
By Elizabeth Harrington
Obamacare has cost roughly 300,000 small business jobs due to higher health care costs, according to a new report.
The American Action Forum, a center-right policy institute, released findings Wednesday that rising premiums and regulations under the Affordable Care Act have had “dire” consequences for the labor market.
The report found the law has cost $19 billion in lost wages per year and forced 10,000 small businesses establishments to close their doors. The study covered employers with 20 to 99 employees.
“Research from the American Action Forum (AAF) finds regulations from the Affordable Care Act (ACA) are driving up health care premiums and are costing small business employees at least $19 billion in lost wages annually,” the report said. “These figures varied by state, but in 2015 the ACA cost year-round workers $2,095, $2,134, and $2,260 in Ohio, New York, and North Dakota, respectively.”
“Premium increases, a prospect regulators predicted when issuing the first ACA regulations, also significantly diminished the number of business establishments and jobs nationwide,” the report said. “Across the country, small businesses (20-99 workers) lost 295,030 jobs, 10,130 business establishments, and $4.7 billion in total wage earnings. Florida lost 17,950 jobs; Ohio lost 19,000; Pennsylvania lost 15,680; and Texas lost 28,010 jobs due to higher sensitivity to rising health care premiums and the ACA.”
Ben Gitis and Sam Batkins, the authors of the report, used data from the U.S. Census Bureau, the Medical Expenditure Panel Survey, and the Bureau of Labor Statistics for their findings.
The report used different data sets for small businesses with less than 50 employees, which were exempt from the law’s employer mandate. However, this group also suffered job losses and lower wages after Obamacare went into effect. The paper compared data from up to six years before the law was passed to show a clearer picture of Obamacare’s impact on small business.
Before Obamacare became law, workers still saw an increase in their average weekly pay when health insurance premiums went up.
“After the ACA became law, however, a one percent increase in total premiums was associated with a 0.012 percent decrease in average weekly pay,” the report said.
The numbers add up to roughly $3.9 billion in lost wages for small businesses with between 20 and 49 workers, which account for 20 million workers in the United States. The average worker for those businesses has lost $1,202 in annual pay.
Aside from wage losses and job cuts, Obamacare has cost the economy $51 billion and added 172 million hours of paperwork through regulations, the American Action Forum said.
“To put that in perspective, it would take more than 86,200 employees working full-time (2,000 hours annually) to complete a year of new ACA paperwork, roughly the population of Miami Beach, Fla.,” the report said.
The incoming Donald Trump administration has vowed to repeal and replace Obamacare, and congressional Republicans have already begun the process to repeal the health care law through the budget reconciliation process.
“There are many reasons policymakers have called for significant amendments to the ACA,” the American Action Forum said. “Higher premiums are typically cited as a top concern. However, these higher premiums have broader consequences for the labor market. As AAF’s research has shown, ACA regulations have contributed to at least $19 billion in lost wages, 10,000 fewer establishments, and nearly 300,000 lost jobs.
To read the article online, click here.
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Debate on Resolution to Provide Legislative Tools Needed to Repeal Obamacare, Transition to Patient-Centered System
Today, we take the next step in the process of providing the American people a better way on health care.
We’ve all heard from constituents and families struggling to get by as they suffer the consequences of the fatally-flawed health care law.
In my home state of North Carolina, the average Obamacare premium has increased by a staggering 40 percent.
Terry from Advance, North Carolina, is a 70-year old retiree. But now he’s working part-time just to help pay his wife’s health care premiums, which jumped from $300 a month to more than $887 a month.
On top of higher premiums, deductibles have skyrocketed too. Patricia from Kernersville now has a whopping $6,550 deductible, and her premiums increased by 80 percent this year. Like so many Americans, Patricia is paying more for less coverage.
And despite being promised, “If you like your health care plan, you can keep it,” millions of Americans have been kicked off their plans.
Scott from Hickory has had his health insurance canceled three times now—disrupting his continuity of care.
We’ve also heard from countless small business owners who can no longer afford coverage for their employees because of limited resources and soaring costs.
Facing similar challenges, school leaders and college administrators have spoken out about how Obamacare is exacerbating tight budgets — hurting teachers, faculty members, and ultimately, the students they serve.
The current situation is not sustainable. So, Republicans are here on a rescue mission by providing the American people relief. It’s time to repeal President Obama’s government takeover of health care. It’s time to advance patient-centered reforms that lower costs, provide more choices, and put working families — not government bureaucrats — in control of their health care.
I urge my colleagues to support this budget resolution, because it will move us one step closer to the patient-centered health care the American people desperately want and need need.
Time for New Leadership and a New Direction at the Labor Department
By Rep. Virginia Foxx (R-NC), incoming-chair of the House Committee on Education and the Workforce
In the new year, a new secretary will take the helm of the Department of Labor. Working families and small business owners face tough challenges, and they desperately need a labor secretary who will put their interests — not special interests — first. Andy Puzder is just the man for the job.
Puzder has real-world experience creating jobs, and he knows that American workers and business owners both need to thrive. He will provide a sharp break from the failed policies of the last eight years.
Time and again, the Department of Labor under President Obama has pushed extreme and partisan rules that will do a lot of harm and little good. Under the guise of helping working families, the heavy-handed regulations of Secretary Perez will actually hurt working families.
Take the department's fundamentally flawed overtime rule. The central planners at the department claim the rule will provide workers a pay raise, when in reality it will raise costs on small businesses, destroy jobs, decrease real income for families, and make it harder for low-wage workers to climb the ladder of opportunity.
The Obama administration likes to talk about "fairness," but it is not fair to impose a rule that creates this much havoc across the country. There is also nothing fair about a regulatory scheme that restricts access to affordable retirement advice for low- and middle-income families, or rules that stack the deck in favor of union bosses at the expense of working Americans.
It's because of misguided policies like these that we have experienced the slowest economic recovery since the Great Depression. That's why wages have been largely stagnant and why there are fewer manufacturing jobs today than when President Obama took office.
For years, bureaucrats who have never owned a business have micromanaged the business decisions of employers, and the consequences speak for themselves. Fortunately, Puzder will bring the change workers and employers desperately need.
Under his strong leadership, CKE Restaurants has thrived and grown to more than 3,700 restaurants worldwide. CKE restaurants and franchises in the United States employ more than 75,000 men and women. Puzder will bring a fresh perspective and practical experience to help solve America's economic challenges.
He will make sure that creating jobs for hardworking Americans comes first. He will work to eliminate unnecessary government regulations that suppress growth and wages, and he will help restore balance to federal labor policies. He will also take a responsible approach to federal overtime policies to ensure they do not harm hard-working Americans trying to advance in the workforce.
With Puzder leading the Department of Labor, Americans who feel left behind will have a strong ally who will fight for them. Through hard work and determination, Puzder has achieved the American Dream, and he wants all Americans to be able to turn their dreams into reality too.
There is no shortage of challenges to tackle in the coming months, but we have an historic opportunity to advance bold, conservative reforms that will help begin a new era of prosperity for our country.
As the next chair of the House Committee on Education and the Workforce, I look forward to working with Andy Puzder and our new president, Donald Trump. Together, we will turn back the failed policies of the last eight years, send a message to the world that America is open for business, and help more families achieve a lifetime of opportunity and success.
House Republicans are working to provide Americans a Better Way when it comes to health care, recently putting forward a plan to deliver every American meaningful, patient-centered reforms. The White House, on the other hand, continues to tout the president’s unworkable health care law despite its harmful consequences for working families and younger Americans—consequences that just keep mounting. The latest disappointing news is health care premiums will increase sharply next year, rising an average of 25 percent in federal health care exchanges, and many individuals will have just one insurance provider to choose from. Bad news no matter how you look at it, but in a new editorial, the Wall Street Journal explains that the “headline number understates the extent of the trouble.” As we’ve said repeatedly, it’s time for a Better Way.
Another ObamaCare Shock
By Editorial Board
President Obama took a health-care victory lap last week in Miami, celebrating “all the progress that we’ve made in controlling costs” and portraying the law’s critics as “false and politically motivated.” Does that apply to the actuaries at the Health and Human Services Department too? On Monday they reported that ObamaCare premiums will soar 25% on average next year, and this is “progress” all right, in the wrong direction.
That headline number understates the extent of the trouble. Liberals used to dismiss insurance premium shock by saying that the subsidies will offset any increase and, anyhow, beneficiaries can shop around for a cheaper plan. But the 25% figure refers to the rate spike for the second-cheapest “silver” plan on each exchange from state to state, which is a key benchmark in the subsidy formula. In other words, these are the mid-level insurance plans that are performing the best, not the average increase of all ObamaCare coverage.
HHS also disclosed the premium jumps for a 27-year-old buying the second-cheapest silver plan in individual states. Our condolences for such young people in Arizona, where their premiums will climb by 116%. Likewise for Oklahoma (69%), Tennessee (63%) and Minnesota (59%).
In a normal election year, the presidential candidates might debate solutions, but, well, you know. For the time being, perhaps Mr. Obama could show a little more intellectual humility when confronted with evidence of his own failures. But, well, you know.
To read the editorial online, click here.
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