The State by State Impact of the Affordable Care Act Regulations

October 17, 2012

The complete overhaul of the health care system under the Affordable Care Act (ACA) is slated to cost states billions in regulatory costs, says Sam Batkins of the American Action Forum.

  • To date, the ACA has imposed a minimum total of $27.6 billion in new regulations.
  • An additional $20.4 billion in lifetime costs has been imposed upon private entities.
  • In addition, there has been $7.2 billion in increased burdens on state budgets.

Batkins evaluates the impact of the regulations on state and private entities by looking at the 10 most expensive regulations.

  • Operating rules: $5.9 billion.
  • Community First Choice Option: $5.7 billion.
  • Establishment of Exchanges: $3.4 billion and 1.1 paperwork burden hours.
  • Rules for Health Care Electronic Funds Transfers: $3.3 billion and 140,772 paperwork burden hours.
  • Adoption of Standard Health Plan: $2 billion and 60,300 paperwork burden hours.
  • Medicare, Medicaid, CHIP; Transparency: $1.7 billion and 8 million paperwork burden hours.
  • Menu Labeling: $757 million and 2.6 million paperwork burden hours.
  • Medicaid Program Eligibility Changes: $580 million and 21.2 million paperwork burden hours.
  • Group Health Plans and Insurance Issuers: $275 million and 2.7 paperwork burden hours.

The paperwork burden hours are an important cost associated with the regulations that typically get avoided in discussions about the ACA. A robust work year consists of about 2,000 hours; therefore if there are 10,000 hours in paperwork burdens, there have to be five workers dedicated to it. In essence, the employer either lost five workers or needs to add five workers, increasing costs for the business.

Batkins finds that five states will have at least $1 billion in new regulatory costs as a result of the ACA.

  • California has the highest burden with $3.4 billion in compliance costs and 2,917 lost employees' work.
  • Texas has a $1.8 billion burden and 1,292 lost employees' work.
  • New York has a burden of $1.7 billion and 1,383 lost employees' work.
  • Illinois has a $1 billion burden and 816 lost employees' work.
  • And finally, Florida has a $1.6 billion cost imposed on them with 978 lost employees' work.

Source: Sam Batkins, "The State by State Impact of ACA Regulations," American Action Forum, October 2012.

 

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