Monday, January 21, 2013
Concerns About the Effects of Health Care On Hiring Predate the ACA
The above chart is from the latest Philadelphia Federal Reserve Manufacturing report.
Let's look at this from two perspectives. First, look at the red line, which shows the first answer given. Here, by far the two most often given answers are "demand is too low" and "want to keep costs down." While the former is directly caused by the overall high level of global economic malaise, the latter is simply a standard business concern.
When the total top three answers are given, the above are still the top two answers given, totaling about 5%-6% more than health care concerns.
I do think that the health law objections/concerns are far more real than many given them credit for. The bottom line is these new laws cut a deep and wide swath through corporate decision making. And the fact that these rules are still evolving and have only recently been found to Constitutional add to the uncertainty.
But health care cost concerns are hardly a new development. Since roughly 2000, there has been a constant discussion about the rising trajectory of health care costs and what can be done about it. For example consider this chart of the annual percentage change in health insurance premiums over the last 10 years:
Looking at this data in more detail, we see the following costs of health insurance:
To argue that "uncertainty" over health care is a primary driver of high unemployment ignores the history of this issue, and the fact that rising costs have caused a headache for human resource and accounting departments for far longer than the ACA has been in existence. In addition, the ACA was passed in response to the fact that higher costs were hindering overall economic health and growth. It's primary focus to change the nature of our health care system from responding to serious medical situation to preventative care would help to seriously alleviate upward cost pressures. As to whether or not the ACA lowers US health care costs, only time will tell.
Posted by Hale Stewart at 1/21/2013 10:00:00 AM