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Thursday, November 12, 2009

Small Biz Health Care Daily: ObamaCare and Small Business

Despite opposition from the business community and ever-mounting concerns from consumers (who are voters and taxpayers as well), the Obama White House and congressional leaders keep pushing ahead with big government health care.

Even though these politicians continue to claim that these measures would be good for small business, in reality, the problems for small businesses would be formidable, including facing new mandates and taxes, and higher costs.

Sally Pipes, author of The Top Ten Myths of American Health Care, wrote a piece for the November 6 Investor’s Business Daily titled “Health Reform Would Bury Small Business.” She noted the following:

• Several new studies show that ObamaCare will dramatically increase health costs for most small businesses.

• One study relied on actuarial data from WellPoint, a large health insurer that provided customer data in 14 states where it operates Blue Cross plans. The report concluded that 70% of small businesses would experience higher health insurance premiums if the Democrats' health plan passes.

• … a different study, produced by Blue Cross Blue Shield and the consulting firm Oliver Wyman … estimated that the average small business would experience a 19% jump in premiums within the first five years of ObamaCare's passage.

• A third study, from America's Health Insurance Plans and PricewaterhouseCoopers, found that the reform bill approved by the Senate Finance Committee would result in a 28% increase in premiums for firms with fewer than 50 workers by 2019.

Why would this be the case? A key issue that Pipes highlights is the imposition of new mandates and regulations that would raise the cost of health insurance.

What does that mean for small businesses? Pipes writes: “Managers would likely compensate for these new costs by discontinuing health benefits, cutting wages, holding off on new hires or even laying off workers. Can the Democrats' efforts really be called ‘reform’ if they'd leave workers and businesses alike worse off?”

Good question.

Raymond J. Keating
Chief Economist
Small Business & Entrepreneurship Council

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