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Herger, Pitts Statements on the Negative Impact the Democrats’ Health Law Has Had on American Job Creators

September 23, 2011

Washington, DC – Today, Ways and Means Health Subcommittee Chairman Wally Herger (R-CA) and Energy and Commerce Health Subcommittee Chairman Joe Pitts (R-PA) released the following statements on the 18 month anniversary of the health care law to highlight the reform’s negative impact on job creators:

Rep. Herger: “Employers have said time and time again that they need help with costs.  Unfortunately, more than a year has passed and their calls have gone unheeded – there has been no relief from the high cost of health insurance.  Despite the President’s repeated promises that the Democrats’ health care law would lower the cost of health insurance, employers are still facing higher health costs and a higher cost of doing business – both of which are making it more difficult for employers to continue offering health insurance coverage in the workplace.  At a time when Americans continue to face economic uncertainty and job creation remains stagnant the law is still hurting, not helping improve affordability.”                      
Rep. Pitts: “It has become abundantly clear that the ‘if you like it, you can keep it’ promise the president made to the American people has been broken. The health reforms fail to decrease the rising cost of health care; meanwhile, the law’s mandates make it more difficult for job creators to provide health care for employees.  Employers should be incentivized to provide coverage, not punished.  And consumers, not government bureaucrats, should be deciding what health care plans best fit their needs.”

By the Numbers: Democrats’ Health Care Law –
Costs on the Rise and Access in Jeopardy

A 2011 report in Health Affairs authored by economists and actuaries from the Centers for Medicare and Medicaid Services (CMS) highlighted that the year the Democrats’ health care overhaul was signed into law, 5.1 million Americans lost their employer-sponsored health coverage.

A survey from McKinsey & Co in 2011 found that overall, 30 percent of employers say they will definitely or probably stop offering health care coverage in the years after 2014. And, among employers with a high awareness of the law, those saying they will stop offering coverage increases to more than 50 percent.

A Buck Consultants survey of over 200 employers and health care organizations determined:

  • “The majority of respondents believe health care reform will have the opposite effect of its intended purpose. Three-quarters (75 percent) of respondents think it will increase health care costs somewhat or significantly; with 43 percent indicating that costs will increase significantly.
  • “Over 90 percent of the survey respondents anticipate passing on some or all of these additional costs to employees through higher employee contributions or reduced coverage.”

An NFIB survey found that 75 percent of small businesses that offer health insurance do not believe the law will slow the rise in health care costs.

According to the Administration’s own estimates, 49 to 80 percent of small-employer plans, 34 to 64 percent of large-employer plans, and 40 to 67 percent of individual insurance coverage will not be grandfathered by the end of 2013.

As CMS Chief Actuary Rick Foster explained, “For businesses that have relatively low-income workers, it can turn out to be a win/win to drop their former coverage.”