It sometimes seems that the Affordable Care Act, unpopularly known as Obamacare, is being blamed for everything except the weather, and now large retailers say they're seeing signs it's hurting sales.
Walmart has been suffering anemic sales lately -- it just reported its third consecutive drop in comparable-store sales -- and says it's afraid the looming implementation of Obamacare could make things even worse.
"For many of our customers, having to afford health care and insurance may be another line item in their personal budget that they may not have had to cover previously." Carol Schumacher, vice president of investor relations, told analysts on Thursday, the Wall Street Journal reported.
The idea behind Obamacare, of course, is to provide insurance coverage for families that currently have no coverage. But for lower-income consumers who are barely scraping by already, the addition of even a small monthly premium could cause them to cut back on other purchases, Walmart and other retailers fear.
Walmart's not alone. True Value hardware's CEO says Obamacare is "a massive concern."
"Discretionary spending will certainly be impacted by the changes in the contribution Americans will have to make for health care," John Hartmann said Friday, the Journal reported.
Disaster or blip?
So is this a disaster in the making or just a blip?
Many economists vote for the blip. After all, Americans now spend 17.7% percent of GDP on health care, far more than any other developed country.
As Ezra Klein and Evan Soltas point out in the Washington Post's Wonkblog, if the U.S. could get health care spending down to 12%, there'd be an extra $893 or so billion floating around in the economy, money that could be spent on consumer goods, education, infrastructure and, presumably, the lottery.
Of course, the lottery is what uninsured Americans have now: by going without health insurance, they're basically gambling that they won't get sick. But as with most games of chance, the odds favor the house; after all, everyone gets sick eventually and without insurance, the options are to go to the emergency room and let everyone else pick up the tab, or take an even riskier gamble by going without medical care.
A recent RAND Corporation study, meanwhile, may provide some comfort to the Walmarts of the world, if they're able to pause and look beyond same-store sales over the next quarter.
The study finds that people who are currently uninsured -- which would include many of the lower-income consumers who are Walmart customers -- will see the largest drop in health care spending when they become insured under Medicaid.
"Among the groups we studied, a clear benefit of the Affordable Care Act is that it will reduce the risk of facing catastrophic medical costs,” said Christine Eibner, a study author and a senior economist at RAND, a nonprofit research organization. “Consumers with the lowest incomes will see the most-dramatic reductions of their risks.”
People who will be newly insured and do not qualify for government subsidies -- younger, healthier consumers with relatively well-paying jobs -- are those who are most likely to see increased total spending as they begin paying premiums for health coverage.
Overall, the RAND study found that out-of-pocket medical expenses will decline for most consumers who become newly insured or change their source of health insurance under Obamacare.
In other words, costs may rise slightly for higher-income Americans and go down for lower-income individuals -- which seems to be what most fair-minded people would vote for.
Leaving aside politics and economics for a minute, the primary goal of the Affordable Care Act is to deliver better health care at lower cost. This is a big order and one that's not likely to happen quickly or smoothly, as the frothy run-up to implementation shows.