Business groups say the Democrats' "Affordable Care Act" is an oxymoron that will raise costs and lead to both fewer jobs and lower wages.
Countering White House claims of savings, the National Federation of Independent Business estimates that companies will shoulder $570 billion in new taxes and fees under Obamacare.
"We need health-care reform, but what was written and put into law was not the reform we wanted," said NFIB spokeswoman Stephanie Cathcart. "We're not seeing cost reductions, and the bill was handed to employers."
In a teleconference on Tuesday, the Obama administration talked up the small-business tax credits that will defray a portion of the costs of purchasing employee health insurance. The credits range from 35 percent to 50 percent of premium costs.
Karen Mills, head of the U.S. Small-Business Administration, said "4 million of 6 million" businesses would be eligible for the breaks.
Questioning that estimate, Cathcart noted that the credits are limited to a maximum of six years, and said the only businesses eligible for the maximum are those with 10 or fewer workers earning an average wage of $25,000.
"Those firms will benefit, but you're still asking them to provide something that costs $2,000 a head," Cathcart said.
In anticipation of the health-care law, the Kaiser Family Foundation found that the number of small businesses purchasing health-care plans rose 9 percent in 2010 -- a turnaround from previous years.
Rebecca Blank, acting deputy secretary at the U.S. Department of Commerce, argued that any effort at repealing the health-care law would "plunge industry into uncertainty and break the backs of families and businesses alike."
But a study by McKinsey & Co. sees substantial disruption under the new law. McKinsey calculates that 80 million to 100 million people will find themselves switched to other coverage when Obamacare takes effect in 2014.
To avoid the impending mandate that requires companies of 50 employees or more to provide health-care coverage or pay a penalty, Diana Furchtgott-Roth, a former chief economist at the U.S. Department of Labor, said:
"It's clear that every firm with fewer than 50 workers is trying not to grow larger than the magic number. And every firm with 55 or 60 workers is trying to lay off workers, or contract out operations, so as to reach 50 and not have to pay the penalty."
On the other hand, Mills contends that Obamacare will loosen "job lock" and inspire entrepreneurship by broadening health-care coverage and guaranteeing insurance to 129 million Americans with pre-existing conditions.
(The Department of Health and Human Services figures that 7.8 million non-elderly Florida residents have some type of pre-existing health condition.)
NFIB's Cathcart says the administration is papering over the true costs of Obamacare. Even smaller companies not held to the insurance mandate face skyrocketing fees and taxes, she says.
"There are health insurance tax increases for everyone in this big monstrosity," Cathcart said, citing a projected $8 billion to $14.3 billion in new annual fees imposed on the kind of insurance plans currently used by smaller companies.
"We conservatively estimate that individual premiums will increase $500 a year," she said, adding that rising Medicare payroll taxes will climb 2.35 percent under the law.
Faced with higher costs, Furchtgott-Roth sees restaurants and retailers scaling back on hiring.
"With higher-skill jobs, employers can offer the required benefits and pay for them by cutting the wage. But low-wage jobs in the restaurant and retail sectors leave little room for cuts in wages.
"Hence, firms have an incentive to become more automated, or machinery-intensive -- and hire fewer workers," Furchtgott-Roth, a senior fellow at the Hudson Institute, wrote in the Washington Examiner.
Blank believes that Floridians will come out ahead with the new health-care law. Citing a study that found Sunshine State medical bills were higher than charges for comparable procedures in Minnesota, Blank said health-care reform will bring costs down by "streamlining transactions and encouraging preventative care."
Jose Gonzalez, vice president for governmental affairs at the Associated Industries of Florida, said AIF's members support repeal of the health-care law because of uncertainty about its provisions.
Gonzalez also expressed concern about the law's variable treatment of companies.
"When you carve out some and hit others with onerous penalties, it creates winners and losers. The effect of that on the economy has yet to be seen," he said.
Meantime, U.S. companies fret over how to digest the sheer volume of paperwork.
"There's administrative burden just to try and understand the 2,400 pages of the document," Jenn Mann, vice president of human resources at software maker SAS Institute Inc., told the Wall Street Journal.
As a result of Obamacare, Mann said, SAS is doubling its legal and consultant expenses for 2011.
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Contact Kenric Ward at kward@sunshinestatenews.com or (772) 801-5341.
