Affordable: Ocare Could Cost Large Employers Up To $5,900 Extra Per Employee

by William Teach | April 3, 2014 6:57 am

Hooray, affordable reform!

(Washington Free Beacon[1]) Obamacare will cost large companies between $4,800 and $5,900 more per employee and add hundreds of millions to their overhead, according to a new survey[2].

The American Health Policy Institute conducted a confidential survey of 100 large employers–those with 10,000 or more employees–asking what costs they expect to incur from Obamacare over the next decade.

Factoring in the health care law’s added mandates, fees, and regulatory burdens, employers anticipate cost hikes between $163 million and $200 million in 2016, a 4.3 percent increase. By 2023, employers will be paying 8.4 percent more than “what they would otherwise be spending” for their employees’ health care.

In the next 10 years, the total cost of Obamacare to all large American employers is estimated to be from $151 billion to $186 billion, according to the study.

Just to be clear, the cost per employee number is over 10 years. ACA supporters will say “hey, that’s just roughly $500 extra per year per employee! No biggie!” Of course, when it is their own company, and other things get cut, when raises are limited, when jobs are done away with, when hours are cut, hey, when they own the company and see their own earnings being reduced, they won’t like it. Fortunately, free contraception.

What could cause the increases?

• Patient Centered Outcomes Research Institute fee;
• Temporary Reinsurance Fee;
• General ACA implementation and administrative costs;
• Excise tax on high cost plans;
• Mandate to cover adult children up to age 26 as dependents; and
• Other benefit mandates including covering 100 percent of preventive care services.

The indirect costs of the ACA include, but are not limited to:

• New supply chain taxes passed onto employers (e.g., medical device tax);
• Increased take up rates of employer offered coverage resulting from the individual mandate; and
• Increased cost shifting from the expanded Medicaid coverage.

Might a large business be able to eat these costs? Perhaps, to some small degree. But, most likely, things will have to change, and the workers will be the one to suffer. Thanks, Obama and Democrats!

Crossed at Pirate’s Cove[3]. Follow me on Twitter @WilliamTeach[4].