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Employers’ Analysis of Democrats’ Health Law: Increasing Health Costs, Jeopardizing Health Benefits and Harming Job Growth

June 23, 2010

This week, the Business Roundtable (BRT) and The Business Council, representing American companies with more than 12 million employees and comprising nearly a third of the total value of the U.S. stock markets, issued a dire warning to the White House Office of Management and Budget Director Peter Orszag about the consequences of the Democrats’ health law. 

According to these key employer groups, President Obama and the Democrats’ health overhaul, “does little to change the underlying problems of our delivery system, which are the primary drivers of the unsustainable cost trends of employer provided care.”  As a result, employers are, “delay[ing] business decisions regarding expansions and dampen[ing] new hiring.” With unemployment hovering around 10 percent, America simply cannot afford a one trillion dollar health care law that is preventing employers from hiring new workers. 

BRT and The Business Council also warn that, “the potential for detrimental unintended consequences on the nation’s economy and workers is very high,” for the following reasons:

  • “The imposition of employer mandates inhibits our ability to specifically structure our plans to our workforce and will likely result in [health care] cost increases”;
  • The new tax on high-cost plans, referred to as the Cadillac tax, “will divert resources away from investment in new technology, process and jobs, and will significantly increase costs”;
  • The changes to the tax treatment of retiree prescription drug plans will cause employers to, “reduce or eliminate prescription benefits to Medicare eligible retirees”;
  • Regulations limiting insurer spending (medical loss ratios) have the potential to “increase premiums” and “hurt quality and patient safety”;
  • Restricting workers’ use of Flexible Spending Accounts (FSAs) “impact employees” and “hamper economic recovery”; and
  • The Democrats’ health law adds new administrative burdens, making it “even more costly to offer healthcare benefits – both a global competition and job creation issue” and “will serve to increase premiums and drive up the cost of coverage.”

Last week, the Administration’s own regulations conceded that up to 2 out of 3 Americans with health insurance through an employer could lose the plan they have and like. has reported that internal company documents reveal at least four major U.S. employers (AT&T, Verizon, Deere and Caterpillar) are considering “dumping the health care coverage they provide to their workers in exchange for paying penalty fees to the government.”  A clear consensus has formed; Democrats’ grand experiment with the nation’s health care system is too expensive for taxpayers and workers.