The high cost of health insurance is a huge burden on American businesses large and small, stunting their ability to grow, innovate, compete, hire American workers, and ultimately rebuild the American economy. The Patient Protection and Affordable Care Act is good for business, good for jobs, and good for the economy. The legislation lowers health care costs to allow American businesses to focus on what they do best, not on health care costs, and includes other provisions to directly create jobs and get our nation’s economy moving again.
High health care costs put American businesses and workers at a competitive disadvantage. The United States spends more on health care than any other developed nation, yet experiences billions of dollars in lost productivity each year due to the uninsured. And, according to the Business Roundtable, “Health care costs are one of the top cost pressures facing American businesses today, inhibiting job creation and hurting America’s ability to compete in global markets.” [Business Roundtable, 3/12/2009]
· In 2007, the United States spent a total of $2.2 trillion on health care, which represents $7,421 per person or 16 percent of GDP. [Health and Human Services, accessed 3/11/2009] This is nearly twice the average of other developed nations. [Organisation for Economic Cooperation and Development, 12/10/2008]
· A recent study shows that the U.S. economy loses between $124 billion and $248 billion due to the “uninsured Americans who live shorter lives and have poorer health.” [Center for American Progress, 5/29/2009]
· A recent study by the Business Roundtable found that U.S. workers and employers receive 23 percent less value from their health care system that the average of our leading economic competitors in the G-5 group. [Business Roundtable, 3/12/2009] Furthermore, “the G-5 countries spend approximately 63 cents for every dollar the United States spends on health care – yet the health of the U.S. workforce lags by 10 percent in a composite measure.”
· U.S. manufacturing firms are at a competitive disadvantage due to high health costs, averaging $2.38 per worker per hour. These costs for our major trading partners are just $0.96 per worker per hour. If nothing is done to curb costs, annual health care costs per employee could increase by 166 percent to nearly $29,000 over the next decade. [New American Foundation, 5/08; Hewitt Associates, 9/09]
Lowering the cost of health care will lower the unemployment rate in the short- to medium-run. Bringing down health care costs will be good for jobs. The reforms included in the Patient Protection and Affordable Care Act to improve quality and slow cost growth will, in the short- to medium-run, lower the burden on businesses and enable them to hire more workers.
· The President’s Council of Economic Advisers (CEA) estimated that by simply slowing the growth of health care costs by 1.5 percent per year, the unemployment rate could fall by 0.24 percentage points and jobs could rise by 500,000. [CEA, 6/2/2009] By slowing the growth of health care costs, which the Patient Protection and Affordable Care Act does, we will improve our economic security as individuals and our competitiveness as a nation.
· Analysis by business groups such as Business Roundtable and other independent analysts shows that reform would slow the growth rate of costs, freeing up funds for job creation. [Business Roundtable, 11/2009] The delivery system reforms and revenue provisions in the Patient Protection and Affordable Care Act provide incentives and create new measures to contain health care spending, allowing employers to hire more workers rather than spending money on rising health insurance premiums.
· A new report by the Congressional Budget Office finds that, under the Patient Protection and Affordable Care Act, premiums will fall by as much as three percent in the large group market and two percent in the small group market, showing that employers will reap the cost savings necessary to hire more workers and make necessary invests in their businesses. [CBO, 11/30/2009]
The Patient Protection and Affordable Care Act will spur entrepreneurship, productivity, and growth at small businesses, helping fuel a key engine of job creation. Health reform will lower costs for small businesses through tax credits and pooled purchasing on competitive health insurance Exchanges – reducing their competitive disadvantage and helping to fuel a key engine of job creation in the economy.
· Firms with fewer than 20 employees accounted for approximately 18 percent of private sector jobs in the year with the most recent data, and nearly 25 percent of net employment growth from 1992 to 2005. [CEA, 7/25/2009]
· Unfortunately, the cost of health care is holding small businesses back. Forty percent of small business owners have said that high health care costs have a negative effect on other parts of their business, like preventing business growth and hiring more employees. One study found that these higher costs might force more than one-third of small business owners to reduce their employees’ health insurance benefits. [The Main Street Alliance, 1/09; Robert Wood Johnson Foundation, 12/3/08]
· In the current health care market, small firms must compete for workers alongside large firms that may able to afford better benefits due to their size. Under the Patient Protection and Affordable Care Act, the health insurance Exchange will expand options for coverage, making small businesses a more attractive place for people to work, and encouraging people to start up businesses of their own.
· MIT Health Economist Jonathan Gruber estimated that health insurance reform would save 80,000 jobs in the small business sector by 2019. As he testified before the Senate HELP Committee in November, “Lower spending has real consequences for small businesses and their workers. I estimate that under reform workers in small businesses will see an increase in their take-home pay of almost $30 billion/year, and that reform would save about 80,000 jobs in the small business sector by 2019.” [HELP Committee, Gruber Testimony, 11/2/2009]
The Patient Protection and Affordable Care Act helps American businesses and creates jobs.
· The Patient Protection and Affordable Care Act reduces premiums by as much as three percent in the large group market and two percent in the small group market, which will improve the global competitiveness of American businesses and allow them to hire more workers to lower the unemployment rate. [CBO, 11/30/2009]
· Lower health care spending under the Patient Protection and Affordable Care Act will help small businesses, the engines of economic growth, by increasing employee take-home pay and saving approximately 80,000 jobs in the small business sector by 2019. [HELP Committee, Gruber Testimony, 11/2/2009]
· The Patient Protection and Affordable Care Act creates health insurance Exchanges to ensure access to quality, affordable health insurance options for small businesses, includes a rate review process to ensure that premiums do not spike from year to year, and provides approximately 3.9 million American small businesses with a tax credit to help offset the cost of offering health insurance coverage to their employees. [PPACA, accessed 12/2/2009]
· The Patient Protection and Affordable Care Act expands coverage to 31 million uninsured Americans, which CEA finds “is likely to increase labor supply by reducing disability and absenteeism in the work place. This increase in labor supply would tend to increase GDP and reduce the budget deficit.” [CEA, 6/2/2009; CBO, 11/18/2009]
· The Patient Protection and Affordable Care Act ends coverage limitations based on pre-existing conditions and expands portable coverage options, which will help to reduce “job lock,” freeing workers to be more flexible, and increasing the flexibility and productivity of the economy. [PPACA, accessed 12/2/2009]
· The Patient Protection and Affordable Care Act and the health provisions of the American Recovery and Reinvestment Act invest billions of dollars in modernizing the health care infrastructure, creating high-tech jobs for skilled workers to modernize medical records and work to interconnect health information technology throughout the health care system. [PPACA, accessed 12/2/2009; ARRA, accessed 12/2/2009]
· The Patient Protection and Affordable Care Act creates new jobs for doctors, nurses, and other health care providers by investing billions of dollars directly in the health care workforce, especially in the areas that have the greatest need for more health care providers. [PPACA, accessed 12/2/2009]
· The Patient Protection and Affordable Care Act creates science and technology jobs by encouraging the development of new drugs and new treatments. The bill creates a new pathway for the approval of biosimilar biological products, called “follow-on biologics,” which will create jobs for the scientists, laboratory workers, and doctors who develop these drugs and conduct the tests needed to ensure their safety and secure their approval. [PPACA, accessed 12/2/2009]
· The Patient Protection and Affordable Care Act creates jobs for skilled researchers who analyze wellness and public health. The bill devotes millions of dollars in funds toward research in wellness, epidemiology, and public health, investments that will create job opportunities for skilled workers in fields that improve the nation’s health. [PPACA, accessed 12/2/2009]