Home » Human Resource Management » The High Cost of PPACA

The High Cost of PPACA


The New York Federal Reserve Manufacturing Survey and Business Leaders Survey report alarming findings. According to these reports, the Patient Protection and Affordable Care Act (PPACA) (P.L. 111-148) increased the costs of 35% of manufacturers and 20% of service firms in New York significantly in 2014. Overall, health care costs have increased by 9% to 10%.

The reports for 2015 are even more grim, with an anticipated cost increase of at least 10% affecting 50% of manufacturers and 30% of service oriented companies.

Paying for the PPACA

This spells disaster for the workforce. Due to the increase of premium, most businesses are forced to raise employee premiums as well as increase deductibles and other out-of-pocket costs. On top of that, the size of their networks will shrink. Furthermore, a reported 20% of New York manufacturing and service firms plan to reduce employees overall, and cut down on the number of full time employees by increasing part-time employees and outsourcing more. And if that weren’t bad enough, another 20% of companies will cut employee compensation as a way of paying for the PPACA.

Raising prices to help pay for PPACA

This is also bad for the consumer because it means raising prices. A reported 30% of companies had to raise prices to help pay for PPACA. So for many in the American workforce, they will get paid less, have higher health care costs, and have to pay more for consumer products and services.

Based on an article by Jeff Carlson, CCH News Staff, Sept 3, 2014