California workers could suffer under Obamacare

California workers could suffer under Obamacare

A coalition of 26 states filed a petition recently asking the U.S. Supreme Court to review a lawsuit challenging the constitutionality of President Barack Obama’s health care reform law. California should have been the 27th. That’s because no state stands to take a bigger economic hit when and if Obamacare is fully implemented.

For those lawmakers in Sacramento who stubbornly refuse to believe that the president’s makeover of the nation’s health care system is bad for California, they should take a look at a new report released this week by the Kaiser Family Foundation, a nonprofit research group.

Annual premiums for employer-sponsored health insurance increased to $15,073 this year, according to the Kaiser study. That’s up 9 percent from 2010, which is nearly triple the rate of inflation over the past year, and more than quadruple the increase in average employee wages.

It is hardly a coincidence that this year’s dramatic run-up in the cost of premiums, following several years of relatively modest increases, comes before new Obama regulations take effect in 2012 requiring health insurers to justify to the federal government any increase in premiums of more than 10 percent.

Add to that provisions of Obamacare that already have taken effect, including government mandated health coverage for adult children up to 26 years of age and federally-required coverage of mammograms and other such preventive tests and screens, and its clear that the president’s health care law is driving up employer health care costs.

White House static analysis assumes that employers will not change their behavior though faced with higher labor costs owing to Obama’s expensive new health care mandates.

But that’s just wishful thinking. The obvious reaction by employers to higher health costs for each worker on their payrolls is to hire fewer new employees than they otherwise would. That is, if they do not actually lay off workers to cut costs associated with new federal health mandates.

That’s the very last thing California needs with the state economy shedding jobs in July and August, according to the state Economic Development Department.

Anyone who says that full implementation of the health care law will improve, rather than worsen, the state’s job climate is smoking some of that medicinal marijuana sold in cannabis clubs throughout the state.

“This year’s 9 percent increase in premiums is especially painful for workers and employers struggling through a weak economy,” Kaiser President and Chief Executive Officer Drew Altman said. What remains to be seen, he added, is whether that is “a one-time spike or the start of a period of higher increases.”

If it’s the latter, it’s quite likely the net job losses California suffered in July and August (and probably September) will be a regular occurrence over the next 12 months and beyond.

Meanwhile, the White House promised that the average family of four would save as much as $2,300 a year on its health insurance premiums by 2014, compared with what it would have paid without Obama’s health care law.

Meanwhile, California’s Democratic politicians continue to embrace Obamacare, continue to believe against all evidence to the contrary that it will create more jobs than it destroys here in the Golden State, and reduce, rather than increase, family health care bills.

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Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.