One in 5 New York companies say they're hiring fewer people because of Obamacare

Reuters/Jessica Rinaldi

Some companies in the Empire State say they are slowing down hiring because of 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 employing fewer workers because of the Affordable Care Act, the healthcare law known as Obamacare, while 16.8% of respondents in the service sector said the same.

As the New York 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," the New York Fed report said.

"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 New York Fed survey said they anticipated an 8% 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 caused by Obamacare, however, as the New York Fed noted.

"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 aging workforce," the report on the survey said.

The respondents from the two sectors also said they were changing their plans at similar rates. Thirty-nine percent 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 labor market of the ACA has been negligible, and survey-based measures can be affected by a variety of factors, but it would be unwise to dismiss the findings.

The news comes the day after Aetna announced that it would remove itself from 70% of the counties in which it now offers health insurance on the exchanges created under Obamacare, making it the third of the five biggest insurers in the US to make drastic cuts to their ACA business.

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