ACA Will Cost Manufacturers $22.2 billion 2014-2016

By December 12, 2013Health Care

It’s going to be a while before we can accurately measure the entire impact the Affordable Care Act has or is having on American businesses. However, I recently calculated some of the easily isolated costs of implementing the ACA for manufacturers over the next three years. By estimating the impact on manufacturers as an industry, I hoped to provide some perspective on what the law is asking of our economy as a whole and it’s not good.

Over the next three years, it will cost manufacturers in the United States at least $22.2 billion to cover just the new fees, taxes, surcharges and administrative compliance requirements contained in the ACA. This estimate only includes the $63.00 per participant reinsurance fee, the $2.00 per participant Patient Centered Outcomes Research Institute (PCORI) fee, additional paperwork and reporting requirements to the Internal Revenue Service and other agencies, the medical device manufacturer tax, and the pharmaceutical manufacturer tax. Again, these are just the new fees, taxes and administrative burdens manufacturers will have to pay over the next three years.

Employees and their families will not get one more doctor visit, one more prescription filled or any healthcare services at all. It’s simply added cost to manufacturers and likely lower wages for employees. According to the Kaiser Family Foundation, about 76 percent of manufacturers offer health insurance to their employees and roughly 83 percent of them enroll in their employer’s coverage, which is among the highest across industries. Manufacturers have consistently demonstrated a commitment to their workforce, but it is being undermined at nearly every turn by the ACA.

At no time in history has increasing the cost of everything associated with a product, service or good decreased the cost of that product.

The ACA is not a bill, it is not theoretical, it is the law. Manufacturers have no choice, but to follow it. The notion of doing away with the law is appealing in many regards, but also unrealistic. As the organization representing 12,000 manufacturers and 12 million people who make things here in America, we’re asking Members of Congress to look at all federal laws – including provisions of the ACA – that make it more expensive to provide coverage to employees and fix them so we can be competitive.

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