As Obamacare looms, manufacturers brace for the worst
More than 80 percent of manufacturers see health care costs as their top business concern
Another day, another survey about Obamacare.
About a week ago, we reported on a survey of hiring among small- and medium-sized businesses, which found the Affordable Care Act to be only a minor factor in determining the number, and type, of employees on their payroll. [http://www.inc.com/Adam-Bluestein/Obamacare-hiring.html] Apparently, few of those survey respondents were manufacturers-;who are viewing the approaching implementation of Obamacare with dread.
Among the 317 companies who participated in the National Association of Manufacturers/Industry Week Q2 Survey, 82.2 percent said that “rising health care/insurance costs” was their top business concern-;ahead of taxes and regulations, uncertainties about the political climate (each cited by 66.9 percent of respondents), and well ahead of worries about weaker domestic and foreign sales of their products (cited by 50 percent and 27 percent, respectively).
Health-care anxiety is up from last quarter’s survey, when 74 percent of respondents listed insurance costs as a top concern. “Even in three months, it’s ticked up in a way that’s statistically relevant,” says Joe Trauger, NAM’s vice president of human-resources policy. “It’s having an impact on how they’re conducting business-;trying to decide whether to decide additional people and making other long-term planning decisions.”
Ninety-nine percent of manufacturers surveyed already offer health benefits to their employees. So their big concern isn’t about having paying a bunch of new premiums, but rather seeing their existing premiums go up even more than they already have-;8.5 percent on average in each of the past two years. The respondents anticipate an average premium increase of 14 percent in 2014, but that’s an estimate: While some companies have already started negotiating next year’s rates, many are simply guessing guess based on past experience and their internal utilization data. “I think the larger message here,” says Trauger, “is that no one is expecting rates to go down. Everyone expects moderate to significant increases.”
The certainty about which way premiums are headed is countered by confusion about almost everything else having to do with Obamacare: About 56 percent of those surveyed said they were either not prepared or uncertain about how they planned to implement the ACA at the beginning of 2014. And more than 41 percent said they were uncertain if their business would participate in a health insurance exchange.
Kvetching about health-care and politics aside, 51.6 percent of manufacturers surveyed expected their payrolls to hold steady, and more than twice as many companies expected to add full-timers (32.5 percent) than to cut them (15.9 percent).