Categorized | Senate News Briefing

Obamacare Likely to Spur Retail, Restaurant Cuts, Businesses Brace For Health Care Cost Increase

Since President Obama and Democrats in Congress jammed through their unpopular health care law two years ago, barely a week has gone by without new news stories of the negative consequences of this legislation, which Republicans warned about before the bill was passed.


The Wall Street Journal reports today, “Employers in the retail and restaurant industries are more likely than other companies to drop their health plans or cut workers’ hours when new health-law requirements take effect in 2014, according to new data from the consulting firm Mercer. A Wall Street Journal article last week said retail and restaurant franchisees were bracing for higher costs as part of the law, and several said they planned to change workers’ health benefits. The chief executive of the Papa John’s International pizza chain, John Schnatter, said this week that the law’s requirements for employers would add 11 cents to 14 cents to the cost of a pizza.”


Politico adds, “Nearly two-thirds of employers expect to see a cost hike in their health plans when the Affordable Care Act goes into effect in 2014, and a quarter say they will have to make changes to their coverage to avoid penalties, according to the survey by the Mercer consulting firm. Retail and hospitality industries, which typically employ larger numbers of part-time workers, are bracing for the biggest increase in costs — 46 percent said they’re expecting costs to increase by a minimum of 3 percent. The health care industry is close behind, with 40 percent expecting that increase in costs.”


Further, The Journal notes, “According to a Mercer survey of 1,203 employers released Wednesday, about 9% of retail and hospitality employers were planning to drop their existing health plans once new insurance exchanges are set up in 2014, compared with 6% of companies across all sectors. The survey also found that retail employers who don’t currently offer coverage were more likely to consider cutting employees’ hours to avoid requirements of the law. The law says that employers with 50 or more full-time workers—defined as those working at least 30 hours a week—must offer qualifying health-insurance coverage. If they fail to do so and at least one of the workers turns to government subsidies to buy coverage, the employers must pay a penalty. Many retail employers are close enough to the 50-worker threshold that it might make financial sense to cut hours and avoid the penalties for not offering coverage.”


As Senate Republican Leader Mitch McConnell argued last week as he was again blocked by Democrats from getting a vote on repealing Obamacare, “When the health care bill was working its way through Congress, you’ll recall that the former Speaker of the House, Speaker Pelosi, famously said we’d need to pass the bill to find what was in it. Well, now that we’ve had some time to study its consequences, I can’t think of any reason why Senators wouldn’t want to stand up and be counted with a vote on the floor—either for or against repeal. Does Obamacare get a passing or a failing grade? . . . I’ve been clear in my view that the Democrat health care law is making things worse and should be repealed in full.  A week doesn’t seem to pass that we don’t learn about some problem this law creates or doesn’t solve. . . . Let’s have a vote. Is Obamacare making things better or worse?  Let’s show the American people where we stand.”


About Tom White

Tom is a US Navy Veteran, owns an Insurance Agency and is currently an IT Manager for a Virginia Distributor. He has been published in American Thinker, currently writes for the Richmond Examiner as well as Virginia Right! Blog. Tom lives in Hanover County, Va and is involved in politics at every level and is a Recovering Republican who has finally had enough of the War on Conservatives in progress with the Leadership of the GOP on a National Level.

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Tom White Says:

Nothing is more conservative than a republican wanting to get their majority back. And nothing is more liberal than a republican WITH a majority.

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