ObamaCare's Hidden Hit On Businesses
April 8, 2014
Many of the most damaging parts of the Affordable Care Act are unknown to voters, says Bernie Marcus, cofounder of Home Depot and founder of the Job Creators Network.
Inside the Affordable Care Act is a "health insurance tax" (or HIT) levied on all insurance companies on premiums for policies sold to individuals and small- to medium-sized businesses. Expected to generate $8 billion in revenue in 2014, the HIT will simply be passed on to consumers in the form of higher premiums.
- According to the National Federation of Independent Businesses (NFIB), the HIT will add $475 per year to the average individually-purchased family policy -- $5,000 over a 10 year period.
- Small businesses are in an even worse position, and employer-provided family policies will see costs rise by $6,800 over a decade.
Most large companies self-insure, so the tax does not hit them. It is the small- and medium-sized businesses that will bear the burden of this tax, many of whom will either raise the portion of premium payments owed by their employees or simply lay off workers.
- Private sector employment, according to NFIB, will lose at least 146,000 jobs simply due to the HIT. For a sense of scale, 146,000 is more than the total number of employees working for Costco, Microsoft and Delta.
- Fifty-nine percent of this reduced job growth will be in small- and medium-sized businesses, and 26 percent in very small businesses.
- That is a major problem: the 28 million small businesses in the United States make up 99.7 percent of all U.S. employers. What is more, they create 63 percent of new jobs in the private sector.
This reduced job growth has further impacts on the U.S. economy, NFIB predicts that total gross domestic product in 2022 will be somewhere between $23 billion and $35 billion smaller than it would have been without the HIT. (Again, for a sense of scale, consider the fact that McDonald's grossed $27.6 billion last year.)
The Affordable Care Act is not even going to accomplish its goal of cutting the number of uninsured in half. Simultaneously, it has brought massive problems -- not only losing health coverage for the previously insured, but killing jobs with measures such as the health insurance tax.
Source: Bernie Marcus, "ObamaCare's Hidden Hit On Businesses," Wall Street Journal, April 1, 2014.
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