NCPA - National Center for Policy Analysis

The Impact of Health Reform on Businesses

October 27, 2010

The health industry officially accounts for one-sixth of the American economy.  Yet the effects of reforms to our health care system will go far beyond the health care sector and will impact every business in the United States, says Hadley Heath, a policy analyst at the Independent Women's Forum specializing in health care policy and economics.

The reforms in the Patient Protection and Affordable Care Act, along with the Health Care and Education Reconciliation Act (both passed in March 2010), will have numerous far-reaching consequences for businesses.  In particular, the new law will:

  • Significantly restrict the choices of employers and their employees with regards to health insurance coverage.
  • Raise taxes on businesses and create significant new paperwork burdens.
  • Discourage job creation and growth in the economy.

In evaluating this new health care legislation, it's important to consider not only how the new law impacts the medical system, health care costs and quality of care provided, but how the law affects businesses, workers and the general economy.  Unfortunately, this law will have a significant negative impact on the business climate, will discourage business expansion and job creation, and will slow economic growth, says Heath.

Source: Hadley A. Heath, "The Impact of Health Reform on Businesses," Independent Women's Forum, October 2010.

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