Workers Lose Under Obamacare

Member Group : Commonwealth Foundation

Imagine one Monday your boss tells you the company is cutting your hours so they don’t have to give you health insurance. This bad news is compounded when you start shopping for insurance and discover that premiums have skyrocketed in the last few years.

That’s a tough blow for any worker, but it’s becoming the new normal for individuals and families across Pennsylvania—even labor unions that supported the law are voicing their concerns.

Recently, the Nevada Chapter of the prominent union coalition AFL-CIO released a resolution stating, "The unintended consequences of the [Affordable Care Act] will lead to the destruction of the 40-hour work week, higher taxes, and force union members onto more costly plans—eventually destroying [union health plans] completely."

No wonder Health and Human Services Secretary Kathleen Sebelius visited Philadelphia to defend the Affordable Care Act (ACA) against growing public opposition. Secretary Sebelius continues to deny the law’s adverse impact on workers, but stories of layoffs due to Obamacare are a dime a dozen.

Thanks to the ACA, public sector workers like school aides around the state are losing hours, pay and in some cases even their jobs. East Lancaster County School District and Dallas School District in Luzerne County are cutting back on support staff to avoid the ACA’s "employer mandate" that penalizes employers for not offering health insurance to full-time employees—encouraging employers to use part-time workers and contractors, instead.

Ironically, the very organizations that ostensibly exist to protect these public sector workers—government unions—enthusiastically supported the job-killing law.

For example, in 2012 and 2013 the National Education Association gave $250,000 to Health Care for America Now!—a group lobbying for Obamacare. The Service Employees International Union also launched $12 million in television ads supporting the law. It seems these unions failed to take into account the law’s many negative consequences.

The ACA was intended to expand access to health insurance, but in practice it reduces employment, increases insurance premiums, and hikes taxes through a complex labyrinth of rules and regulations. In effect, it’s making it harder—not easier—for the average person to access health insurance.

Under the ACA, all employers, including governments, with more than 50 employees must provide full-time workers—those working 30 hours or more per week—with health insurance. Moreover, employer health insurance plans must meet new federal regulations and mandates regarding the cost to employees. Failure to meet these mandates results in a substantial fine.
That’s a major burden on job creators around the country and here in Pennsylvania.

Because of the health care law’s harsh financial penalties, restaurant chains including Applebee’s and Papa John’s, big box stores like Wal-Mart and even grocery stores like Wegmans are cutting hours or benefits. In fact, the people who struggle the most to find affordable health care—the working poor—are those hardest hit as their hours and paychecks shrink.

President Obama recently suspended this job-killing employer mandate—though his authority to do so is questionable—until after the next election. Unfortunately, that still leaves businesses trapped in an state of uncertainty, not knowing when the government will require them to provide insurance or face a penalty.

Not only are these workers being hurt with fewer hours and less pay, but they will pay more for insurance under the ACA. So, too, will small businesses and full-time workers.

Three years into the ACA, average family premiums have increased by $3,000. The CEO of Highmark predicts premiums will continue to rise ¾this after Highmark already increased Pennsylvania’s individual and small group rates in 2010 and 2013. Meanwhile, Aetna raised premiums in Pennsylvania by 10 percent in 2011, noting the ACA as a significant cost driver.

Elected officials must now find ways to protect both public and private sector workers from such skyrocketing premiums and pay cuts. A good start would be giving those without employer-based insurance the same tax benefits businesses receive—leveling the playing field for all Pennsylvania workers.

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Elizabeth Stelle is a policy analyst at the Commonwealth Foundation (

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