Now we know why. The Federal Reserve noted the reason in its monthly “Beige Book” report on the state of the economy.
“Employers in several Districts cited the unknown effects of the Affordable Care Act as reasons for planned layoffs and reluctance to hire more staff,” the Fed reported.
That’s right. Businesses are worried about Obamacare, and they’re trimming staff and leaving positions unfilled because of its unknown costs.
The situation is just going to get worse, says Sally Pipes of the Pacific Research Council.
“The more businesses learn about the president’s health reform law, the more they’re coming to realize that ‘affordable care’ is the last thing it will provide,” she wrote in Forbes recently. “And that’s in large part due to the multibillion-dollar tax that Obamacare is set to levy on health insurance companies. Starting next year, insurance companies will have to remit $8 billion to the federal treasury. The tax climbs to $11.3 billion in 2015 and 2016, to $13.9 billion in 2017, and to $14.3 billion thereafter.”
That tax will, of course, “be largely passed through to consumers in the form of higher premiums for private coverage,” the Congressional Budget Office says.
Those premiums could rise by 3 percent or more.
Individuals and businesses in some states will pay far more, according to Oliver Wyman’s research. Small businesses in West Virginia, for example, will have to deal with
more than $9,000 in added costs for a family plan over the next decade. Those in Nebraska will get hit with almost $8,000 in new costs.”
The tax also hits Medicare Advantage plans.
“The cost of the private Medicare Advantage plans that about a quarter of seniors currently enjoy is set to rise nearly $3,600 over the next ten years, thanks to the tax,”
Pipes noted. “In Florida, for example, seniors will pay an additional $4,000 in premiums.”
The tax also discriminates against for-profit insurance companies.
“Unlike just about every other tax they pay, for-profit insurers won’t be able to deduct the premium tax from their earnings,” she said. “So a good chunk of their income will effectively get taxed twice — once to satisfy Obamacare’s premium tax, and then again when they pay the corporate tax. That means they’ll have to raise premiums even higher.”
The law also exempts non-profits that do business with the government.
“Scrapping Obamacare’s burdensome and misguided premium tax would put money back in the pockets of American businesses — money they could use to keep the nation’s unemployment rate a whole lot lower than the 8 percent of the last four years,” Pipes contended.
We won’t see a real recovery until employment picks up — and that won’t happen as long as employers have to worry about Obamacare’s costs.