ObamaCare has directly impaired economic recovery, a recent study by the Heritage Foundation found. According to the Bureau of Labor Statistics, America averaged an increase of 67,600 private sector jobs per month between January 2009 and April 2010, showing strong signs of economic growth after the recession. On March 23, 2010, ObamaCare became law. Between April 2010 and June 2011, directly following its passage, this growth slowed to a crawl at a mere 6,500 new jobs per month nationwide, less than 10% of the original rate. Could this staggering hit to the economy be a consequence of ObamaCare? Absolutely. It has paralyzed businesses because it discourages employer growth past 50 full-time workers through insurance mandates, and it is vague in the scope of its regulated benefit standards and corresponding cost structures.

According to Section 1513 of the law, every company with more than 50 employees must offer health insurance to its workers as of 2014 or be forced to pay a penalty. Surpassing this cutoff would cause a very significant increase in benefit costs to a growing small business, and it thus disincentivizes expansion. ObamaCare also leaves a great deal of regulatory control in the hands of the Secretary of Health and Human Services (HHS), who will set many of the specific rules that the law itself does not explain. One of these unclear segments is Section 1302, regarding the ‘‘essential health benefits package.” According to the law, “the Secretary shall define the essential health benefits,” which will then be used to determine actuarial values for “bronze, silver, gold, and platinum” levels of coverage. HHS likely won’t issue a proposed rule that defines these standards, much less a final rule, until late 2011 or early 2012. These standards will then shape premium prices. Until then, businesses are in the dark when it comes to the future cost of providing health insurance, and as such, cannot safely make significant workforce increases.

Correlation certainly does not prove causation, but business owners themselves have already voiced their concerns with the effect of these particular regulations on their bottom line. TPPF recently highlighted McKinsey’s survey, which showed that business owners are planning to make major changes to their benefits packages and workforce down the road because of ObamaCare. It appears they may already be shielding themselves from the oncoming hit to their profit margins in 2014.

-Luke ShuffieldResearch Fellow, Center for Health Care Policy