How Obamacare Kills Jobs

In my research I've been fortunate enough to communicate with Dr. Robert Kaester with the institute of government affairs at the University of Illinois. Dr. Kaester has authored many publications on the topic government regulation and taxation during his tenure at the Univeristy of Illinois. He was kind enough to send me a report where he highlights how obamacare could potentially negative consequences for employers and employees alike. Below my summary of his presentation.

The United States spends $2.5 Trillion of health care a year and health care spending grows twice as fast as the economy as a whole. Obamcare is an aggressive measure to contain these costs but may end up killing jobs and expansion. The Individual mandate requires that all Americans purchase health insurance or be fined by 2.5% of taxable income. A business that has more than 30 employees will be affected the most because they will be required to provide health insurance to part time workers who work more than 30 hours a week or be fined $2,000 per uninsured employee. The problem with this is that it does not stop employers from cutting hours to avoid the cost of health care and the employee would still be uninsured with less income. With the average price of health care being $6,000 with an employer picking up $4,800 of the cost, an employer would SAVE $2,800 by deciding not to cover their employees. The CBO estimates that 5 million workers will be affected by this and concedes there could be much more as the responses of businesses to this law has not been fully determined. Therefore, an employer who decides not to cover an employee would simply be incurring a fine of $2,000 and their employees would still not be covered.



Sources: Dr. Robert Kaster at the University of Illinois.

Dr. Sneedar Potarazu: http://www.foxnews.com/health/2012/12/12/warning-signs-your-employer-might-drop-your-health-benefits/