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OCBC Weighs in On ObamaCare

On Nov. 09, the Register’s Opinion pages published opposing views on health care reform ["Is it time to dismantle health reform law?"], one of which mentioned Orange County Business Council research by Wallace Walrod. OCBC’s report, cited in the piece by Daniel Zingale of the California Endowment, was an initial assessment compiled to understand how health care reform, its costs and benefits will impact California businesses, which can be viewed [HERE].

Like the vast majority of the California business community, OCBC and its members are still assessing the true impacts. Our research found that there may be benefits, but there are still many questions, costs and concerns.

OCBC shares the concerns voiced by the author of the companion piece [HERE], Sally Pipes of the Pacific Research Institute, about how reform will be implemented. For example, a primary concern of the business community is uncertainty regarding employer insurance costs. Early estimates of impacts range from moderate to severe.

Another concern expressed by many businesses focused on so-called “Cadillac Plan” taxes that hit businesses, but not unions. “Cadillac Plans” refer to employer-sponsored health insurance benefits that exceed $10,200 for individuals or $27,500 for a family. California employers rely on generous medical benefits to help attract and retain top employees. Many factors, such as having an older worker population or being located in a high-cost metropolitan area, are not under an employer’s control.

Other areas of concern include: coverage of adult children of employees until the age of 26 (a practice 6 percent of companies now offer); auto-enrollment of new hires (12 percent of companies do this); coverage of part-time workers, which may actually cause businesses to stop hiring; and the effect on state and federal budgets (costs are primarily front-loaded, projected benefits come over time).

Finally, as mentioned by Ms. Pipes, the effect of the IRS Form 1099 requirement for every vendor with more than $600 in annual business expenses is especially burdensome for small California businesses.

The full OCBC report is posted at www.ocbc.org/research.cfm We will conduct further research to expand and refine these findings.

There are many outstanding questions yet to be addressed before any health care reform can be implemented successfully in California. Our initial research was just the beginning, educating both pro-reform advocates as well as opponents. In a time of unprecedented economic uncertainty and record high unemployment, dialogue based upon facts is key.


Posted on December 1, 2010


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