The negative side of Obamacare
With the manner that President Obama trumpeted the Affordable Health Care Act, “Obamacare” would significantly help small companies and businesses. In fact, President Obama even stated that companies, with the adoption of “Obamacare”, would be able to save enough money to give their employees a raise in their monthly salary. However, the promise of “Obamacare” was sadly broken, with the Center for Medicare and Medicaid Services, the Federal entity responsible for implementing the large sum of the new law’s rules and policies, leading the change in tune of the Obama government.
In a report by the agency, it reported that approximately two-thirds of the small companies in the United States will experience an increase in the health care costs as a result of the adoption of the Affordable Health Care Act. The problem originates from the law’s mandate that insurance companies cannot factor in a person’s health when setting premiums. Though the factor is well-intentioned, this will result in the accidental side effect in increasing premiums across the board, particularly for the young and working class (Philips, 2014, p. 1).
The Affordable Health Care Act includes a “play or pay” requirement that punishes companies that have more than 50 employees who do not give their employees health care insurance coverage, or offers extremely expensive coverage options if one or more workers of the company buys subsidized coverage on a “state health insurance exchange” by 2014. The “play or pay” requirement will have a significant impact on coverage as well as employment policies.
For companies with 50 or fewer workers who do not provide coverage, it will be highly unprofitable to expand beyond the limitations in the law and be penalized, thereby reducing the payroll of the company. In the estimate of labor analysts, the $2,000 penalty is equal to 15 percent of the general wage being implemented in the restaurant sector and almost 10 percent of the wages in the retail industry. The downside here is that the employers, knowing that the penalties can be quite significant, will resort to one of two options; hire lower wage employees or reduce the number of their employees in favor of automation.
Though it is believed that an estimated one-third of companies will have some of their workers that will find coverage “expensive”, the penalty of under the law is tantamount to $3,000 per regular employee that receive subsidized coverage. Though it is believed that small companies will bear the brunt of the reforms, many medium companies with payrolls of 500 or more employees will also be under threat, and at least one out of five companies with 20,000 or more workers will be at risk (Howard, 2009, p. 5).
The “Obamacare” program authorizes more than $700 billion cuts in Medicare spending from 2013 to 2022. Nevertheless, contrary to the images being projected, the cuts are not targeting any specific area where there is purported waste and fraud. Instead, these are “across-the-board” shifts in the formulas used in setting Medicaid payments for a wide array of Medicare providers.
These include hospitals, senior individuals care facilities, home health entities, and hospice facilities. Even though there are consistent declarations that state that the changes will only impact the providers rather than the beneficiaries, spending reductions in the program will have a direct effect on the people who are heavily dependent on the program’s services (Senger, 2013, p. 1).
Works Cited
Howard, Paul. “The impact of the Affordable Care Act on the economy, employers, and the workforce.” <http://edworkforce.house.gov/uploadedfiles/02.09.11_howard.pdf>
Philips, Tim. “Obamacare squeezes small businesses.” <http://www.usatoday.com/story/opinion/2014/03/01/obama-obamacare-health-business-column/5841331/>
Senger, Alyenne. “Obamacare’s impact on senior: an update.” <http://www.heritage.org/research/reports/2013/08/obamacares-impact-on-seniors-an-update>
