October 1, 2013 4:00 AM
100 Unintended Consequences of Obamacare
Companies, workers, retirees, students, and spouses all suffer from the law’s inflexible mandates.
By Andrew Johnson
The Cleveland Clinic is slashing jobs due to the costs of Obamacare mandates.
Today, Obamacare’s October 1 launch date finally arrived. Ever since its passage, supporters of the law have made countless attempts to convince the American people of its viability, dismissing predictions of lost jobs, decreased hours, and rising costs, among others.
Yet from major corporations to local mom-and-pop shops, from entire states to tiny school districts, a wide range of companies and institutions have seen Obamacare’s negative impact on their workers, budgets, and production. Here are 100 examples of how Obamacare is falling short of what was promised.
(Note: Some items on this list came via Investor’s Business Daily and the Heritage Foundation.)
Earlier this month, the computer giant, once famed for its paternalism, announced it would remove 110,000 of its Medicare-eligible retirees from the company’s health insurance and give them subsidies to purchase coverage through the Obamacare exchanges. Retirees fear that they will not get the level of coverage they are used to, and that the options will be bewildering.
2. Delta Air Lines
In a letter to employees, Delta Air Lines revealed that the company’s health-care costs will rise about $100 million next year alone, in large part because of Obamacare. The airline said that in addition to several other changes, it would have to drop its specially crafted insurance plans for pilots because the “Cadillac tax” on luxurious health plans has made them too expensive.
Fifteen thousand employees’ spouses will no longer be able to use UPS’s health-care plan because they have access to coverage elsewhere. The “costs associated with the Affordable Care Act have made it increasingly difficult to continue providing the same level of health care benefits to our employees at an affordable cost,” the delivery giant said in a company memo. The move is expected to save the company $60 million next year.
4. Caterpillar Inc.
In the law’s first year, the machinery manufacturer estimated before its passage, Obamacare would add more than $100 million in health-care costs. “We can ill afford cost increases that place us at a disadvantage versus our global competitors,” a Caterpillar executive wrote lawmakers, saying that the law would not meet the goal of providing good, inexpensive health care for all Americans.
SeaWorld used to let part-time employees work up to 32 hours per week, but the company is dropping the limit to 28 hours to keep them under the 30-hour threshold at which it would be required to provide health insurance under Obamacare. More than 80 percent of the company’s thousands of employees are part-time and/or seasonal.
6. Stryker Corp.
Stryker Corp., a Michigan medical-device manufacturer, laid off about 1,000 employees earlier this year due to the Affordable Care Act’s 2.3 percent excise tax on medical devices. The company estimated that the tax would cost it approximately $100 million next year. “Stryker remains significantly concerned with the upcoming medical device excise tax and its negative impact on jobs and innovation and will continue to work with Congress to try to repeal the tax,” said the company’s CEO.
7. Welch Allyn
The manufacturer announced that it will have to cut approximately 10 percent of its 2,750 employees, 275 in all, because of the medical-device tax. The company also plans to consolidate manufacturing centers, moving some operations from Beaverton, Ore., to its facility in Skaneateles Falls, N.Y.
8. Smith & Nephew
The British company informed nearly 100 employees at its Massachusetts and Tennessee facilities that they would be laid off “in order to absorb [the] cost burden” of the tax on medical devices.
9. Cleveland Clinic, Ohio
One of the world’s best-known hospitals announced in September that it would slash jobs and up to 6 percent of its annual $6 billion budget in anticipation of costs associated with Obamacare’s implementation. A spokeswoman for the clinic announced that approximately $330 million would be cut, but she did not say how many of the 44,000 employees the clinic would let go. The Cleveland Clinic is Cleveland’s largest employer and the second-largest employer in Ohio.
10. Wake Forest Baptist Medical Center, North Carolina
Last November, the Wake Forest Baptist Medical Center, in Winston-Salem, announced that 950 full-time-equivalent positions would have to be eliminated in order to make up costs from the health-care law.
11. Orlando Health, Florida
In that same month, the Orlando Health hospital system announced the biggest staff reduction in its almost century-long history, as part of a “broader effort” to manage the effects of Obamacare, according to the Orlando Sentinel. Orlando Health will cut as many as 400 jobs across the system, in areas ranging from administrative departments to children’s hospitals.
12. Louisiana State University Hospitals
In the same article, the Sentinel noted that LSU hospitals would cut nearly 1,495 positions in order to save $150 million, apparently because of expected reductions in Medicare and Medicaid payments.
13. Delaware Hospice
Due to new interpretations of the rules for reimbursing for hospice services, Delaware Hospice, the Ocean State’s only not-for-profit hospice provider, had to let 52 employees go earlier this year. “It’s really health-care reform in action,” a spokeswoman said. “This is affecting hospices across the country. We’re working through dramatic changes in terms of the hospice-care benefits.”
14. Lawrence + Memorial Hospital, Connecticut
The New London hospital announced earlier this month that Medicare cuts programmed into Obamacare had led to the firing of 33 employees. “L+M and other hospitals are contending with massive structural changes that are happening very rapidly,” the hospital’s president and CEO said.
15. Clifton Springs Hospital, New York
Fifty-eight non-clinical employees were let go from Clifton Springs Hospital in Rochester as the hospital prepared for the changes spurred by the Affordable Care Act. “No one really knows what the impact will be because it really is a very new way for reimbursing for health care,” the hospital’s CEO told a local news station. “So I think everyone is trying to prepare for a change, and a change with less revenue.”
16. Anthem Blue Cross Blue Shield, New Hampshire
The state’s only insurer approved to offer plans on the health-insurance exchanges in New Hampshire has cut the number of hospitals that will participate in the plan from 26 to 14 in order to reach “affordable premium levels,” according to the New Hampshire Union Leader.
17. Mexican American Opportunity Foundation, California
The nonprofit, which looks after 1,100 pre-K children at its eight Southern California child-care centers, has had to reduce the hours of dozens of employees who used to work 30 to 40 hours per week. “We’re fearful it’s going to be hard to negotiate health care in any contract,” one local labor leader said. “Overall [Obamacare] is a positive step, but on a micro level it’s not all roses.”
18. Carnegie Museum, Pennsylvania
A Pittsburgh news station reports that the Carnegie Museum “reluctantly” scaled back the hours of 48 of its 600 part-time employees to less than 30 hours a week to sidestep the mandate to provide health-care coverage.
19. Fort Smith Area Agency on Aging, Arkansas
The nonprofit revealed that all of its health aides and drivers will work a maximum of 28 hours a week, and that the plan it would offer to its remaining full-time employees would be “bare bones.” To make up for additional Obamacare costs, the organization is asking employees to take steps to save money, such as changing vehicle oil after 5,000 miles rather than 3,000.
20. Emory Healthcare, Georgia
A news station in Atlanta reports that Emory Healthcare, the state’s largest health-care system, will lay off more than 100 employees, in part because of Obamacare.
21. CoverTN, Tennessee
Thousands of Tennesseans will lose their coverage under the state’s health-insurance program because it does not meet Affordable Care Act standards for yearly expenditure caps. CoverTN, which was used mainly by small businesses, had a $25,000 yearly benefits limit. “It was all I had,” one Nashville small-business owner said.
State and Local Governments
22. State of Virginia
In February the General Assembly affirmed Governor Bob McDonnell’s decision to limit the state’s part-time employees to 29 hours per week.
23. Township of Middletown, New Jersey
Middletown has also cut the hours of 25 part-time public employees. “Any of those expenses [for insurance] are going to be passed along to the taxpayers, and so in order to avoid having to do that, we chose to modify the work hours,” said the township’s administrator.
24. Brevard County, Florida
Brevard County’s insurance director told a local television station that the county’s 300-plus part-time employees will be “capped at something less than 30” hours to save the county about $10,000 per employee in health insurance.
25. Township of Berkeley, New Jersey
The Sandy-hit Jersey Shore town said it will “take a hard line” in union negotiations in limiting part-time employees’ hours, because additional health-care costs “are out of the question.” “If it came down to shaving hours to save substantial dollars, that’s something that would have to be considered,” the township administrator said.