Health Care and President Barack Obama

The Affordable Care Act was signed into law to reform the health care industry by President Barack Obama on March 23, 2010 and upheld by the Supreme Court on June 28, 2012. Obamacare’s wide variety of benefit and coverage mandates combined with new taxes, fees, and penalties will increase the cost of providing coverage. The increased costs of health insurance might lead employers with fewer than 50 employees to drop coverage if they currently offer it, as there is nothing in Obamacare that would prevent them from doing so. Employers that do offer coverage might respond by changing their health plans to accommodate the cost increases. For example, UPS has restructured its coverage to exclude the working spouses of its employees. The company expects this to affect 15,000 employees for an annual savings of $60 million. UPS very clearly cites additional costs imposed by Obamacare as a contributing factor in its decision, listing several Obamacare provisions that increased their costs. Obamacare’s employer mandate forces all employers with more than 50 full-time employees defined as those who work at least 30 hours per week to provide health insurance for employees or pay a penalty of $2,000 per employee or $3,000 per employee that receives a premium subsidy, whichever is less.
This creates an incentive for businesses to avoid both the penalty and cost of coverage by hiring part-time employees instead of full-time employees, since businesses will not be penalized for failing to provide health insurance to part-time employees. This affects a wide range of businesses, but it hits low-income workers particularly hard.
Obamacare increases the Medicare payroll tax by 0.9 percent and establishes a new 3.8 percent Medicare surtax on unearned income such as capital gains and dividends for high income earners. Small businesses are major job creators, and higher taxes on them will slow job creation. Moreover, the wage thresholds on this tax increase are not indexed to