How small business are dealing with Obamacare

One of the biggest detractors opponents of Obamacare would bring up when arguing against it was how small businesses would react to the mandate.  The argument that was brought up more often than not was that it would cause small businesses more costs which would hurt employment.  To give small businesses time to figure out their best policy, Obama gave them a break from the mandate until 2015 and for some 2016.  While over 8 million people have registered for Obamacare, small businesses are still trying to figure out the most cost efficient way for them to abide by the new health care law.  Business have two options when it comes to Obamacare.  They can either provide health insurance for all of their workers, or face a penalty of $2,000 per worker.  These added costs have them trying to figure out how to accept these costs without it effecting their bottom line.

Even though many of these businesses have until 2015 to figure it out, many don’t want to wait until then.  Business owners don’t want their customers see a drastic raise in prices to cover these costs which is what would happen if they waited until 2015. Unfortunately, this has had an effect on small business hiring practices.  45% of small businesses polled have said that they have reduced their hiring practices while 23% have said they have had to let workers go to account for these added costs.  The coverage isn’t the only cost that these business have to account for.  Many also face increased taxes and having to pay higher premiums.  The Wall Street Journal released a case study of two different small business and how it would effect their employees.  One of the most interesting interviews that they did of an employee is how he reacts to the new individual mandate.  He says that he is generally a healthy person and doesn’t visit the doctor because he never needed to.  A federal report released said that 65% companies with 50 employees or fewer, who are exempt from the mandatory health care law but offer health care anyway, will see their premiums increase.

While on an individual level, forcing everyone to have health care, even the healthy employees, makes sense because it keeps the premium down because insurance companies can distribute costs among more people.  Due to the 8 million people subscribed to the new health care, it seems almost impossible that the health care law will be repealed.  Unfortunately, the goal of federal health care was to reduce costs for the average American.  While it has reduced premiums in general, insurance companies are still predicted to raise premiums next year across the board due to the higher consumer spending on Health Care.  Instead of lessening the cost of health care, as Obama was hoping, there is now higher demand which will allow doctors to charge higher prices since the majority of these costs will be faced by the insurers.  This will lead to the higher premiums that analysts expect to see from insurers over the next few years.  I for one do believe that access to health care for everyone should be a definition for a developed country, but the US has some of the highest consumer spending on cost of health care and costs of practice.  The costs of providing health care should have been the focus of Obamacare instead of the cost of insurance and premiums.  The costs have just been shifted to insurers and dispersed among more people.  Obamacare feels like a band-aid instead of a systematic change in how health care is practiced.  One of the main reasons that health care costs are so high is due to the insurance that doctors have in case of malpractice suits.  The US has some of the highest malpractice suits in the world and the high costs of these suits are why many specialized visits are so expensive.  It seems that this may be an option that the federal government can look into instead of trying to reduce costs by dispersing them among more people.

One thought on “How small business are dealing with Obamacare

  1. mrosidi

    Thanks for raising this issue. It is interesting to learn different health system in the world.

Comments are closed.