Companies in the Empire State are slowing down hiring due to Obamacare.
According to a new survey by the Federal Reserve Bank of New York, 20.9% of manufacturing firms in the state said they were reducing the numbers of workers they employ due to the Affordable Care Act (ACA), while 16.8% of respondents service sector respondents said the same.
As the NY Fed noted, this still leaves a vast majority of businesses unaffected, but even a one in five change is significant.
“The vast majority of respondents in both surveys said they were not changing the proportion of part-time workers or the amount of work outsourced to other firms,” said the NY Fed report.
“Most respondents also said wage and salary compensation and other benefits were not being affected by the ACA, though more respondents said they were being cut than raised.”
Firms responding to the NY Fed survey said they anticipate an eight per cent increase in healthcare costs for 2016 and a 10% increase in 2017. The 2016 number is lower than the projection made by New York firms last August when the survey was also conducted.
The increased costs were not entirely due to Obamacare, however, as the NY Fed noted there were a variety of reasons for the increased costs.
“Some of the more widely mentioned factors driving up costs included increased premiums from insurance providers, higher costs for prescription drugs, the ACA, and an ageing workforce,” said the report on the survey.
The respondents from the two sectors also said they were changing their plans at similar rates. 39% of manufacturing and 42% of service respondents said they were leaving their healthcare offerings unchanged, while 41% and 39%, respectively, said they were making modifications. About 15% in both sectors said they were switching providers.
The most popular adjustments being made by both sectors included raising out of pocket costs for employees, increasing deductibles, and increasing total premiums.
Some data-based studies have shown that the impact on the labour market of the ACA has been negligible and survey-based measures can be impacted by a variety of factors, but it would be unwise to dismiss the findings.
The news comes the day after Aetna announced that it will remove itself from 70% of the counties in which it currently offers Obamacare, making it the third of the five biggest insurers in the US to make drastic cuts to their ACA business.