5 Effects Obamacare Will Have on Working Americans

Alyene Senger /

Obamacare will certainly have a negative impact on every American, but here are five ways it will harm working Americans:

  1. Two-thirds of American employees’ wages will decrease as employers deal with increasing costs. Heritage’s Drew Gonshorowski explains the results of an Urban Institute study: “The Urban Institute claims that mid-size firms will see spending per person increase by 4.6 percent, while large firms will see spending increases by 0.3 percent per person. According to the U.S. Census, this accounts for 65.1 percent of employees—or roughly 79 million—in the U.S. who are employed by medium- or large-size firms. The study suggests: ‘Any increase in employers’ health-related costs will be offset by decreases in other compensation—whether wages or other benefits.’ This means that individuals in mid- and large-size firms will receive less in take-home wages (or other benefits) and pay a greater proportion of their compensation to health care due to Obamacare.”
  2. Loss of existing insurance coverage. Because of Obamacare’s high costs, experts predict that employers will stop offering employees health coverage, forcing employees into the new government-run exchanges. Although estimates vary, it is likely that millions of Americans will lose their current coverage. For instance, the non-partisan Congressional Budget Office estimates that between 5 million and 20 million Americans will lose employer-sponsored coverage, the American Action Forum estimates 35 million, and McKinsey, a consulting firm, estimates that 30 percent of employers will definitely or probably stop offering coverage after Obamacare takes full effect in 2014.
  3. Premiums in the individual market are set to skyrocket. Obamacare’s new, extreme insurance rules and regulations will have dire effects on the cost of coverage that individuals and small businesses purchase on their own. As Forbes columnist and health policy analyst Avik Roy has pointed out in recent articles, “Obama adviser Jonathan Gruber has estimated that, by 2016, the cost of individual-market health insurance under Obamacare, relative to what it would have been under prior law, will increase by an average of 19 percent in Colorado, 29 percent in Minnesota, and 30 percent in Wisconsin. A prestigious actuarial firm, Milliman, has estimated that individual-market premiums in Ohio could increase by 55 to 85 percent.”
  4. Full-time workers turned part-time to avoid the employer mandate. As Heritage predicted, businesses have already begun limiting the hours their employees can work, turning full-time workers into part-time workers, to avoid paying the employer mandate penalty or providing costly insurance coverage. For example, one of the nation’s 30 largest employers, Darden Restaurants, is experimenting with keeping employees under the 30-hour threshold established for Obamacare’s mandate. According to the Orlando Sentinel, “In an emailed statement, Darden said staffing changes are ‘just one of the many things we are evaluating to help us address the cost implications health care reform will have on our business.’”
  5. The heavy burden of 18 taxes and penalties. Obamacare imposes 18 new taxes and penalties that will cost Americans over $836 billion between 2013 and 2022. These taxes will either hit consumers directly or be passed on through higher prices. For example, the infamous individual mandate to purchase health insurance will be imposed on 6 million Americans in 2016, many of whom are the working middle class. Nearly 70 percent of payers will be below 400 percent of the federal poverty level, and even those below the poverty level could be forced to pay the mandate tax.

Obamacare must be repealed in order to protect hard-working Americans from its harmful and far-reaching effects.

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