On Wednesday, the American Health Policy Institute released a study detailing the massive impact Obamacare will have on large employers in terms of costs over the next decade. According to the Institute, “the costs to those employers over the next decade will be larger than many analysts have previously anticipated.”
The study concluded that for large employers – employers with more than 10,000 employees – the cost will be between $4,800 and $5,900 per employee. That means that overall, they will see cost increases of 4.3% in 2016 and 8.4% in 2023, amounting to between $163 million and $200 million per employer over the next ten years. The total cost for all the large employers: somewhere between $151 billion and $186 billion.
The uptick in healthcare costs reverses a recent trend of slowing cost for companies. The study points out, “Partly due to employer efforts, from 2003 and 2007, the annual increase in employer health care costs slowed from 8.2 percent to 4.4 percent, while the number of people covered by employer benefits increased by 1.0 percent.” Those costs increased quickly in the aftermath of Obamacare: “According to data from the Department of Health and Human Services, health care spending by private businesses increased 4.7 percent in 2012 after rising 4.2 percent in 2011.”
Those costs will jump wildly as Obamacare fully kicks in. And those who pay will be employees, as the study authors found: “the most common ways employers plan to deal with the increased costs due to the ACA are shifting costs to employees and increasing wellness and value-based health care initiatives.”
Study authors Tevi Troy and D. Mark Wilson conclude, “These data demonstrate that the added mandates, fees and regulatory burdens associated with the ACA are increasing the cost of employer-sponsored health care plans, with implications for both employers and employees.”