On the demand side, the elephant in the room is the Affordable Care Ac, what some call ObamaCare. Required family coverage under the act is expected to average more than $15,000 a year. For $15 an hour employees, that sum equals more than half their annual wage. Employers of low-skilled workers therefore are about to get hit with mandated benefit that will increase their labor costs by 50% or more.
To make matters worse, employers don't really know what insurance they will have to provide or what it will cost. The $15,000 number I refer to is an estimate by the Congressional Budget Office. Presumably, employers will have the option of paying a fine equal to $2,000 per worker if they don't provide the insurance. But does anybody think the fine is likely to stay that low? A lot of employers don't. The uncertainty created by all this is possibly worse than the actual monetary burden.
Add to all of this a Dodd-Frank banking bill that is encouraging bankers not to lend and you have a formula for perpetual stagnation — which is pretty much where we are.
John C. Goodman is President and CEO of the National Center for Policy Analysis, Senior Fellow at The Independent Institute, and author of the acclaimed book, Priceless: Curing the Healthcare Crisis. The Wall Street Journal and National Journal, among other media, have called him the "Father of Health Savings Accounts." He is also the Kellye Wright Fellow in health care. The mission of the Wright Fellowship is to promote a more patient-centered, consumer-driven health care system.