UPDATE: OBAMACARE’S IMPACT ON SMALL BUSINESS WAGES AND EMPLOYMENT
by Ben Gitis and Sam Batkins, American Action Forum, January 18, 2017 (excerpts)
Research from the American Action Forum (AAF) finds regulations from the Affordable Care Act (ACA) are driving up health care premiums and are costing small business employees at least $19 billion in lost wages annually. These figures varied by state, but in 2015 the ACA cost year-round workers $2,095, $2,134, and $2,260 in Ohio, New York, and North Dakota, respectively. Premium increases, a prospect regulators predicted when issuing the first ACA regulations, also significantly diminished the number of business establishments and jobs nationwide. Across the country, small businesses (20-99 workers) lost 295,030 jobs, 10,130 business establishments, and $4.7 billion in total wage earnings. Florida lost 17,950 jobs; Ohio lost 19,000; Pennsylvania lost 15,680; and Texas lost 28,010 jobs due to higher sensitivity to rising health care premiums and the ACA….
The increase in employer contributions to health insurance premiums generally hovered around 25 percent. But the increases in some states have been quite severe. For instance, between 2009 and 2015 employer contributions to premiums increased 36.2 percent in Hawaii, 42 percent in North Dakota, 45.9 percent in Kentucky, and 47.6 percent in Ohio….
There are many reasons policymakers have called for significant amendments to the ACA. Higher premiums are typically cited as a top concern. However, these higher premiums have broader consequences for the labor market. As AAF’s research has shown, ACA regulations have contributed to at least $19 billion in lost wages, 10,000 fewer establishments, and nearly 300,000 lost jobs.
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Table 6: Employer Contributions to Health Insurance Premiums
| State |
2009 |
2015 |
Percent Change |
| U.S. State Avg |
$3,713.50 |
$4,703.58 |
26.70% |
| Hawaii |
$3,655.00 |
$4,978.00 |
36.20% |
Table 7: Weekly Pay Loss in Firms with 20 to 49 Employees
| State |
Loss in Weekly Pay |
Loss in Annual Earnings |
Loss in Total Earnings (,000) |
| U.S. State Avg/Total |
$4.73 |
$236 |
$3,879,800 |
| Hawaii |
$6.16 |
$308 |
$21,700 |
Table 8: Weekly Pay Loss in Firms with 50 to 99 Workers
| State |
Loss in Weekly Pay |
Loss in Annual Earnings |
Loss in Total Earnings (,000) |
| U.S. State Avg/Total |
$24.03 |
$1,202 |
$15,446,700 |
| Hawaii |
$28.52 |
$1,426 |
$80,400 |
Table 9: Employment, Business Establishment, and Total Wage Earnings Losses among Firms with 20 to 49 workers
| State |
Jobs |
|
Business Establishments |
|
Total Wage Earnings (,000) |
|
| |
Number |
Percent |
Number |
Percent |
Number |
Percent |
| U.S. State Total |
295,030 |
1.45% |
10,130 |
1.48% |
$4,708,900 |
2.07% |
| Hawaii |
1,850 |
1.93% |
60 |
1.97% |
$26,300 |
2.74% |