On March 23rd, 2010, President Barack Obama signed into legislation the “Patient Protection and Affordable Care Act.” Since then, the new bill, nicknamed “ObamaCare,” has sparked heated controversy all across the country between Democrats and Republicans, each side fiercely tearing at each other with facts and statistics. I was curious as to what all the hoopla was about, so I decided to look into ObamaCare, and find out what I could about the 2,000-page mandate. I decided to discuss ObamaCare with my step mom, who owns a health clinic in Oregon. Getting a small business owner’s point of view on ObamaCare seemed a smart way to get a more objective understanding of how the public was reacting, aside from any political squabble that tends to drown out the issue at hand. While talking with her, she explained how she was forced to shut down her clinic because of ObamaCare. That moment narrowed the focus of my research into one crucial question: Is ObamaCare good or bad for small businesses in America? This is a question that is very complex, as the answer can be a yes, no, or in-between. Democrats support the mandate, while Republicans reject it. Hence the controversy surrounding the bill.
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To further my understanding, I went online and tried filtering through the immense plethora of information on ObamaCare. My next step would be to get a general understanding of what the bill is, and how it works. From what I could gather, ObamaCare is basically a mandate that requires all Americans to have health insurance by 2015, or else suffer a hefty penalty that will increase with each year.
The main focus of the mandate is towards individuals and small businesses whom cannot afford health insurance. According to Karen Pollitz at abcnews.com, ObamaCare is “a law enacted to ensure that all Americans have access to affordable health insurance. It does this by offering consumers discounts (known as tax credits) on government-sponsored health insurance plans, and by expanding the Medicaid assistance program to include more people who don’t have it in their budgets to pay for health care.” To get back to the question at hand, is ObamaCare good for small businesses? Democrats really seem to believe so.
As was said before, Democrats support the mandate, and claim that ObamaCare has helped improve the economy since the law was signed. Not only that, but the mandate has cut healthcare costs. According to obamacarefacts.com, when asked about ObamaCare hurting small businesses, the response was addressed as “The unbiased truth on ObamaCare and Small Business.” The response stated that ObamaCare helps most small businesses, not hurts them.
The response goes on to address how small business owners have had a harder time providing insurance to their employees through history as a result of rising insurance costs. All the while larger businesses remain largely unaffected. The website also states that “today, almost half of America’s uninsured are small business owners, employees, or their dependents.” Small businesses can also apply for a tax credit to help with insurance costs by using ObamaCare, for up to 35% of costs for 2 years, depending on the circumstances.
To restate what was said earlier about what ObamaCare basically is, the mandate includes a certain clause that says that businesses that refuse to offer insurance coverage to employees and individuals who do not have insurance by the end of 2014 will be forced to pay a heavy penalty, about $2-3,000 per uninsured employee. The rates increase each year as well, which should deter large businesses from dropping employees or cutting back everyone’s hours to part-time, to make sure employees get the benefits they deserve.
Here comes the messy part: the political backlash of Republicans refuting the so-called “facts.” Republicans are dead set on their opinion that ObamaCare is bad for small businesses, not good. To begin refuting the Democrats’ claims, the tax credit that small businesses can apply for is not as sweet as the candy looks. Yes, you can apply for the tax credit, but what the Democrats failed to mention is that you have to go through four complicated tests to even qualify. Less than a fourth of small businesses make it past the first three tests trying to get the tax credit. Not to mention that the credit only lasts two years at the most, not very long at all. This makes the credit practically useless, as it is not even assured you will get the full 35%, but rather you can receive up to 35% of the credit, depending on your circumstances.
President Obama had a famous quote from when he was first advertising ObamaCare: “If you like your current health plan you can keep it. We don’t want you to have to change.” This quote haunts the President amidst reports that 3.5 million Americans who purchase health care plans on their own have now lost their coverage because of ObamaCare. Scott Gottlieb writes, “Very soon, small businesses will share a similar fate.” They will also see their health plans canceled as a result of ObamaCare. These small businesses will be faced with a bleak choice: find another, more costly policy that’s compliant with ObamaCare, or put their employees in the ObamaCare exchange.
While a smaller percentage of business plans may get canceled (relative to the fraction of individual market plans that are now being terminated) the small group market is nonetheless much bigger than the individual market. Even if ObamaCare materially affects a smaller slice of the business plans, it will still encumber far more people than the 3.5 million individuals now losing coverage. Some small businesses used a loophole last year in 2013 so that they could delay the mandate requirements until January 1st, 2015. That means they should be getting their cancellation notices in the mail around November of 2014. News of these cancellations will go directly to the employees, much like the cancellations being sent out now.
After researching diligently on ObamaCare, the question I started off with in the beginning is ready to be answered.Yes, there are many bad things about the mandate that affect businesses, such as loss of coverage to employees, penalties that cost businesses their revenue, and people losing their coverage entirely. There are also some good things about the mandate too, like some small businesses will be able to cover their employees with healthcare for the first time. Small businesses can also receeive tax credits and tax breaks to help them survive our economic hardships. But the debate goes on, and every person has their own opinions and bias on the issue, which in turn answers the question for them. For me, I do not like ObamaCare one bit, as it implies that the needs of the few outweigh the needs of the many in terms of healthcare. But that is a question of personal ethics, not the effects of ObamaCare.
Gottlieb, Scott. “Thousands Of Small Businesses Will Also Start Losing Their Current Health Policies Under Obamacare. Here’s Why.” Forbes. Forbes Magazine, 6 Nov. 2013. Web. 12 Mar. 2014. http://www.forbes.com/sites/scottgottlieb/2013/11/06/thousands-of-small-businesses-will-also-start-losing-their-current-health-policies-under-obamacare-heres-why/ “What Is Obamacare?.” About.com US Economy. N.p., n.d. Web. 12 Mar. 2014. http://useconomy.about.com/od/healthcarereform/f/What-Is-Obama-Care.htm “ObamaCare: 2.5 million more jobs lost, another trillion in deficit spending.” Human Events. N.p., n.d. Web. 17 Mar. 2014. http://www.humanevents.com/2014/02/04/obamacare-2-5-million-more-jobs-lost-another-trillion-in-deficit-spending/ “ObamaCare Small Business Facts.” ObamaCare Small Business Facts. N.p., n.d. Web. 13 Mar. 2014. http://obamacarefacts.com/obamacare-smallbusiness.php Neporent, Liz. “Obamacare Explained (Like You’re An Idiot).” ABC News. ABC News Network, 23 Dec. 2013. Web. 17 Mar. 2014. http://abcnews.go.com/Health/obamacare-explained-idiot/story?id=21292932 “Is Obamacare Financially Burdensome for Businesses? – DEBATED.” Obamacare/ Health Care Laws. N.p., 11 Oct. 2013. Web. 12 Mar. 2014. http://healthcarereform.procon.org/view.answers.php?questionID=001840