Health Care Stalling Businesses

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Health Care Stalling Businesses

With the Affordable Care Act soon to go into effect, businesses are scrambling to minimize the costs.

Health care has been one of the most controversial domestic issues of President Obama’s time in office. The plan was developed to provide health care for people who cannot afford it and for people who do not qualify for it due to preexisting conditions. In some ways it appears noble, but the plan will exact a great toll on businesses.

The Affordable Care Act, set to go into effect at the start of 2014, is causing many companies to restructure their staff in order to avoid having to pay the plan’s high costs.

A Gallup poll taken in June interviewed over 600 businesses to discover the repercussions of the health care bill. Forty-one percent of businesses said they have stopped hiring new employees due to the bill, 19 percent admitted to reducing their number of employees, and 38 percent said they “have pulled back on their plans to grow their business.” The Affordable Care Acts requires any company with 50 or more full-time employees to provide insurance for them. Businesses below that mark have ceased from hiring and businesses slightly above it are laying-off employees. This has led to a virtual stand-still in companies around that level of employment.

The Small Business Administration (sba) says there are over 23 million small businesses in America, which account for 54 percent of all U.S. sales. The sba also says that small businesses are responsible for 55 percent of all jobs in the United States.

If growth is not occurring in this sector, it greatly affects the whole country.

The Affordable Care Act also requires that every employer provide health insurance for employees that work over 30 hours a week. These regulations have caused many companies to make cutbacks in order to avoid having to pay the cost of health insurance.

In August, a memo leaked from the clothing store Forever 21 revealed its plans to “reclassify” full-time employees as part-time, which gives them 29.5 hours of work a week—just under the amount required to provide health care.

Darden Restaurants employs nearly 180,000 people nationwide, 75 percent of which are or have recently been reduced to part-time employees. The company has been experimenting since 2012 with different ways it can lower the impact of providing healthcare for employees. SeaWorld, which employs over 18,000 people, has also made cuts to many employees’ hours, from 32 to 28 hours. ups has dropped 15,000 spouses from their medical plan, saying that they are eligible for coverage elsewhere. ups expects to save $60 million a year from this move.

Many of these companies are taking preliminary steps in order to keep up with health care reform, and other businesses are beginning to do the same.

Many businesses have received negative media attention for their actions in response to the health care bill. One commentator wrote to SeaWorld, “If you won’t treat/take care of your employees with fair pay and health insurance, you will not be getting my business.”

Regardless of the course of action the aforementioned companies or others choose to take, someone will be negatively affected. If businesses opt to keep things the way they are, there will be an increase in the price of goods or services in order to cover the costs of providing the insurance. By laying-off employees or making cutbacks in hours, the companies are simply offsetting the price of having to pay for the insurance. Because the bill permits coverage for everyone, it may also lead to an increase in premiums. Forbes reports that there will be a 24 percent average increase in healthcare premiums once the bill goes into effect.

Some states have recognized the crippling effects the bill would have on their economies, and have implemented plans independent of the Affordable Care Act in order to provide health care for those who do not qualify. Oklahoma has recently received an extension from the federal government for its health care plan. Oklahoma subsidizes private health insurance for over 8,000 people and does so with funding it receives from a tobacco tax whose funds are matched by the federal government. Indiana has a similar plan and Arkansas hopes to employ a comparable program in the near future.

As the medical needs of the U.S. continue to increase, health care reform has been one the most important and widely publicized issues of the current administration. Whether it is someone who needs it, a business that must provide it or just an everyday consumer, health care reform affects the whole nation.

The American people have come to rely heavily on health care, and the Affordable Care Act hopes to shift much of that burden onto businesses. The results of that action are already coming to fruition: many businesses in the nation are stalling.

The plans being put into action to offset the costs are solving some problems, but leading to many others. Americans cannot get by without health insurance; the risk is too high to go without it. Having health insurance is a responsible thing for most people to have, but the degree to which it is relied on is doing harm to the nation. America was blessed by God and became one the greatest nations to ever exist. Its people have the opportunity to live long and healthy lives, but all of these blessings are diminishing because the United States no longer looks to the real Provider. The healthcare dilemma is just another curse that is quickly pulling the nation down.

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