Concern about the evolving and complex rules associated with the “Obamacare” health care law is causing many businesses to search out ways of avoiding the expected unaffordable costs.Even some of the original supporters, such as Democratic Sen. Max Baucus, have called the more than 2,000 pages of regulations a “train wreck.” U.S. Senate Majority Leader Harry Reid also agreed May 1 that the law would be a “train wreck” if not properly implemented.
This health care legislation is a very complex law. Seven of 10 Americans now believe it will cause employers to offer smaller paychecks and hire fewer workers. Many employers are already reducing the number of full-time employees to avoid costs associated with the law.
The Internal Revenue Service is preparing to assess annual fees of $8 billion on health insurers next year. This fee will exceed $14 billion in 2018. This cost will be passed on to policyholders. The America’s Health Insurance Plans trade group estimates that this alone will raise family health insurance by $300 next year and $500 after that.
Reuters recently reported that some of the insurers who originally supported the law no longer do so. The four largest have already indicated that they will likely sell plans only in less than a third of the state exchanges that are being set up.
Recent studies by the Congressional Budget Office and others project some health insurance increases will be as high as 203 percent. Young people in the 21-29 age group may see increases of 189 percent by 2014.
When it becomes too expensive to hire workers, businesses must find other ways to get things done. One of the common examples is the self-checkout bar code reading station now in some of our stores. These machines do not require pay for a clerk or health insurance coverage.
Momentum Machines of San Francisco has developed a robot for flipping fast-food burgers. According to Michael Saltsman of the Employment Policies Institute, it replaces three full-time kitchen employees and pays for itself in less than a year. McDonald’s is installing touch-screen terminals in 7,000 of its European restaurants. These will make the cashier position obsolete.
Hospitals will likely lay off workers as robots take their place. The El Camino Hospital in California is using TUG Robots to haul supplies around the hospital and deliver and pickup such things as medications, medical records and meals. As a result, they are reducing their staff by 140 workers.
Children’s Hospital Boston uses robots that appear like trains to deliver meals. The children enjoy getting their meals this way. One TUG robot working two shifts a day is equivalent to 2.8 full-time employees.
American factories have used various forms of robots and remote-controlled equipment for many years. We can expect that the use of such equipment will expand even faster in the future. That will be necessary to remain in business.
Another area where jobs are being streamlined is in education. Many advanced courses are now offered over the Internet. One of the largest providers of online courses is Coursera. It offers 375 courses presented by over 500 professors from 80 schools. The average class size is 37,000 students.
Health care is not the only thing causing employers to seek better ways of doing jobs with fewer employees. Sharp increases in the minimum wage are having the same effect.
Once again, we find that no problem is so bad that our politicians and bureaucrats can’t make it worse. Unfortunately, most of them lack the practical real-world experience to know what the results will be. I think that the laws of economics will once again trump their laws.
Chuck Drury is an Anoka resident, retired engineer and former technical director of Federal Cartridge Company.