Local Governments & Businesses Can't Afford the Affordable Care Act
MERLINE, INVESTOR'S BUSINESS
DAILY - 6/19/2013
When Regal Entertainment Group (RGC) in April blamed ObamaCare for the fact that
it was cutting some of its workers' hours, backers of the law mounted a furious
backlash against the theater chain, among other things filling its Facebook page
with boycott threats.
"Greed and selfishness make me sick," one of them said.
Darden Restaurants (DRI) felt this intense heat last year after
suggesting it might shift to more part-time work to minimize the cost of the
law's mandate that companies offer coverage to all their full-time workers. CEO
Clarence Otis even blamed its lowered outlook for 2013 in part on "recent
negative media coverage" over "how we might accommodate health care reform."
Yet while private companies are getting all this unwelcome and hostile
attention, local governments across the country have been quietly doing exactly
the same thing — cutting part-time hours specifically so they can skirt
ObamaCare's costly employer mandate, while complaining about the law in some of
the harshest terms anyone has uttered in public.
The result is that part-time government workers — many of them low-income —
face pay cuts that can top $3,000 a year, and yet will still be left without
Here is just a small sampling of local news reports about what local
government officials are saying about ObamaCare, and the steps they're taking to
avoid or minimize its costs.
Phillipsburg, Kan.: "School administrators here say they are alarmed and
confounded by the looming new costs they face with the implementation of the
Affordable Care Act," according to the Kaiser Health Institute News Service. Chris Hipp, director of
a Kansas special education cooperative, warned that ObamaCare's costs "could put
us all out of business or change significantly how we do business," adding that
"we are not built to pay full health benefits for noncertified folks who work a
little more than 1,000 hours a year."
Dearborn, Mich.: "If we had to provide health care and other benefits to all
of our employees, the burden on the city would be tremendous," said Mayor John O'Reilly, explaining why the city is cutting its
more than 700 part-time and seasonal workers down to 28 hours a week. "The city
is like any private or public employer having to adjust to changes in the
Indiana: "What I'm seeing across the state is school districts,
unfortunately, having to reduce the hours that they are having some of their
folks work, primarily so they don't have to worry about the (ObamaCare)
penalties, or they don't have to provide them health insurance, which would be
very, very costly," said Dennis Costerison, executive director of the Indiana
Association of School Business Officials. Ft. Wayne Community Schools, for
example, are cutting yours for nearly three-quarters of its part-time aides.
Omaha, Neb.: "The biggest problem is everyone said that ObamaCare is only
going to help cut costs. Nothing could be further from the truth," said Mike Kennedy , who serves on the board of Millard Public
Schools, just outside the city, and figures ObamaCare will raise its costs by
$400,000. A neighboring school district is reducing hours for up to 281
part-time employees to avoid $2.5 million in new costs, which will result in pay
cuts of up to $3,300.
Long Beach, Calif.: "We are in the same boat as many employers," said Tom Modica, Long Beach's director of government affairs. "We
need to maintain the programs and service levels we have now." So the city is
going to cut hours for 200 part-time workers so it doesn't have to pay $2
million to provide health benefits.
Salt Lake City: "With new provisions in the Affordable Care Act, there was
going to be a significant burden upon Granite School District and our taxpayers
to offset the cost of benefits," said spokesman Ben Horsley. He says covering the district's part-time workers
would cost about $14 million, and so about 1,000 will have their hours cut to 29
Cape May County, N.J.: "A number of people in the nation who read it are
recognizing how detrimental (ObamaCare is) to government and private employers
out there," said Gerald Thornton, the county's finance director who is trying
to figure out how to budget for the law.
Virginia: "The Commonwealth of Virginia is grappling with the same issues
that many businesses in the private sector are as they struggle to deal with the
costs imposed by the Affordable Care Act," Paul Logan, a spokesman for Gov. McDonnell, said. The state is
requiring that about 7,000 part-time government workers put in no more than 29
hours a week.
Texas: "The Affordable Care Act has added so much complexity and
administrative burden that there is nothing affordable about it," said Jared Pope, who is consulting with Texas municipal governments
on ObamaCare. Dallas expects its health costs to climb $2.1 million next year.
Plano is cutting hours to avoid $1 million in new costs.
Kern County, Calif.: "It will affect multiple departments, a majority of
departments," said the county's deputy administrative officer Eric Nisbett, explaining that unless the county cut worker
hours for 800 employees, ObamaCare would cost it up to $8 million a year.
Allegheny County, Pa.: "There's frustration and anger and sadness and
resentment, you know, but you don't have a voice," said adjunct English
professor Clint Benjamin in the wake of the Community College of
Allegheny County's decision to cut hours for about 400 adjunct faculty and other
employees so it wouldn't have to pay $6 million in ObamaCare-related fees next
Medina, Ohio: "We feel bad as a city administration and as a council in
having to cut hours from 35 to 29," Medina Mayor Dennis Hanwell said. "We have the budget to pay the people,
but we do not have the budget to pay for the health care." If they hadn't made
that cut, the city faced up to $1 million in new health costs courtesy of
Birmingham, Mich. Commissioner Gordon Rinschler may have summed up best the reaction that
countless businesses and governments are having to ObamaCare, saying: "We simply
can't afford the Affordable Care Act."