mead cohen berger shevtsova garfinkle michta grygiel blankenhorn
Bankrupt Healthcare
Health Care to Suppress Wages Even More

Forget the raise: health care will cut even more into the paychecks of many American workers next year. The WSJ reports on a new report from Bank of America Merrill Lynch:

The bank surveyed 602 CFOs and other finance executives at companies with annual revenues between $25 million and $2 billion. Of those, 69% said they expected their labor costs to rise to cover the costs of the ACA. The CFOs expected an average increase of 7.1%.

More than three-quarters of the CFOs said they would pass those costs along to their employees, and almost two-thirds said they would cut spending in other parts of the business to compensate. Half said they would raise prices to pay for the healthcare.

When Sen. Chuck Schumer sought to distance himself from the ACA he said that the timing for the law was wrong because “and if health care costs were going up, it really did not affect them.” That continues to be untrue. Even if you get insurance from your employer, the lost wages are significant. Anyone who tries to downplay the seriousness of the health care problem is missing the reality of costs that eat more and more into American incomes. In 2009, for example, David Goldhill calculated that even on conservative estimates, a company would put a little under $2 million towards an employee’s health care plan over the course of an employee’s career. If you are concerned about wage stagnation, you have to be concerned about health care.

Features Icon
show comments
  • Boritz

    “…a company would put a little under $2 million towards an employee’s health care plan over the course of an employee’s career.”

    And some companies are not above refusing to hire additional employees because they don’t want to pay this from their money tree.

  • FriendlyGoat

    It doesn’t do average people much good to have more spent on their health care and have it taken away from their wages. HOWEVER,
    it does not do them any more good to get a wage increase and have it taken away from them by a risk-shift of health costs from employer to employee.

    Why aren’t we totally skeptical that most (or hardly any) employers are spending $2,000,000 per employee per career for health care. That’s $44,444 per year over a 45-year career.

    But, if someone can justify that claim on some future projection, then what are we to make of the plight of a $12.00/hr worker who does not get employer insurance and is earning $24,000? Ya think an HSA will fix things for them?

  • Michael Williams

    Why is healthcare so GD expensive? I say lower the bar and let nurses and lower paid professionals do more of the easy doctor shit… something… it’s nuts.

    • ricardo

      Michael, it probably has to do with layers of bureaucracy that must be fed…in a fee-for-service world, one could trade, oh, a couple chickens for an office visit, but then be mugged and killed by gangs of starving bureaucrats in the doctor’s parking lot.

  • teapartydoc

    The answer to health care is abolition of medical licensing. The reason it is this way is because it is a hyper-regulated monopoly.

    • FriendlyGoat

      Are you really a (now-licensed) “doc” interested in competing with everyone of lesser investment in credentialing? Or just the “teaparty” part?

© The American Interest LLC 2005-2016 About Us Masthead Submissions Advertise Customer Service