Survey: ObamaCare Will Shrink Paychecks

Published May 31, 2016

A new Towers Watson survey of employers in America shows an overwhelming majority believe President Obama’s health care reform will increase total business costs, lessen the take-home pay of employees, and reduce benefits.

In the survey, 90 percent of employers said they think ObamaCare “will increase their organization’s health care benefits costs,” 88 percent said they will pass most of the increased cost onto their employees by requiring them to contribute more to the company’s health plan (which will lessen pay), and 74 percent said they intend to reduce their companies’ health benefit plans.

Wages Expected to Decline

Edmund Haislmaier, a health care analyst at the Heritage Foundation, says he is not shocked by the findings. He stresses the new law is ultimately going to achieve the precise opposite of what Democrats said they wanted, an increase in worker pay.

“The findings of this survey were predicted,” Haislmaier notes. “Standardizing benefits and coverage will almost certainly lead to cost increases, if the Department of Health and Human Services does that in 2014. It’s not a choice for employers; it’s economic reality. Anything spent on employee health care is counted as compensation to the employee. That’s the trend we’ve been seeing.”

Haislmaier maintains this trend will likely accelerate under the new health care regime.

“This will further the trend of cash wages remaining stagnant. Employee compensation may continue to go up, but it will not show up in their pockets—just in more and more health care spending,” Haislmaier said. “I do not see how anything in ObamaCare can reverse this trend.”

Congress Expected to Revisit

John Greene, vice president of the National Association of Health Underwriters, says the Towers Watson survey highlights the inevitability of additional changes to the law as workers experience lower wages.

“This survey shows that changes are going to have to be made to the law before 2014 to make it work better,” Greene said. “I do not think they are going to fix it this year, but in the next Congress some of these issues will have to be addressed. The Obama administration certainly knows that there is going to be a need to make some changes here, as employers and workers analyze how the bill affects them negatively.”

Greene believes one reason Democrats on Capitol Hill did not realize what they were voting for and how it would negatively affect cash wages in America is that they did not read the bill.

“House members were asked to vote blindly for something they never read,” Greene explains. “Now they are coming to find out what the Senate bill actually did.”

Thomas Cheplick ([email protected]) writes from Cambridge, Massachusetts.

Internet Resources:

Towers Watson Report on Health Care and Employers