A Six Month Check-Up of the New Health Care Law

Since President Obama is celebrating passage of the Patient Protection and Affordable Care Act (PPACA), SBE Council thought it would provide an evaluation as well. Unfortunately, ObamaCare has already broken many promises and left small business owners more vulnerable than ever in terms of being able to maintain coverage for themselves and their workforce.

At the six-month point of ObamaCare, small business owners are getting hit with higher premiums. And, if the regulatory process continues to move forward on grandfathering, most small business owners will lose the coverage they currently offer or be forced to buy more expensive plans. This is not what small business owners wanted from reform.

Here is SBE Council's diagnosis of PPACA at the six-month point:

• The miniscule tax credits for small business are not working. Many report that the value of the tax credit is too low, and its tight restrictions disqualify many small firms from accessing it.

• Premium costs continue their upward trajectory. Small business owners are reporting premium rate hikes in the 10%-20% range, and higher. PPACA is not helping to lower the cost of health insurance for small businesses – in fact, the new mandates are driving costs higher.

• “Grandfathering” is a joke. Rules issued by Health and Human Services (HHS), if they become final, will force many small firms to purchase more costly plans if they wish to remain “grandfathered” once PPACA fully kicks in. Even the HHS reports that 80% of small firms will lose the plans they currently offer. What happened to the promise of being able to keep the health coverage you currently have?

• Paperwork Nightmare. A massive paperwork burden awaits small business owners in 2012 when they will be required to file a 1099-MISC form for all vendor transactions that total $600 or more on an annual basis. What does this have to do with health care?

• Higher health spending and more bureaucracy. The Center for Medicare and Medicaid Services (CMS) reported that PPACA will increase health care spending by 6.3% annually, consuming nearly 20% of the national’s health care bill. The Congressional Research Service described the size and scope of PPACA’s bureaucracy as “currently unknowable.” More cost to taxpayers – higher taxes for small business owners.

• The high-risk pools are a failure. In Iowa, 32 people have enrolled in the state’s high-risk pool, which beats Kansas where only 17 people have enrolled.

• Uncertainty in the marketplace. Small business owners remain uncertain about scores of other regulations being developed by the federal government as to their impact on health savings accounts (HSAs) and other consumer-directed health plans. Will these plans survive once HHS decides what “qualifies” as health care? Will the definition of essential benefits coverage and other regulatory matters drive HSAs and other savings account plans out of the marketplace?

In sum, ObamaCare has increased costs, uncertainty, and the size and scope of government. Unfortunately, this is only the beginning and we have to hope that more rational heads will prevail in the new Congress so this mess can be fixed.

Karen Kerrigan, President & CEO