Report: O-Care ruling would disproportionately affect small businesses

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Small businesses are among the most vulnerable to steep cost increases in healthcare coverage if the Supreme Court rules against ObamaCare, according to new data from the Urban Institute.

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In addition to the 7.5 million people who could lose their insurance subsidies if the Obama administration loses the case, nearly 3.5 million people on small-business plans would also face “substantially” higher premiums, Linda Blumberg, senior fellow for the Urban Institute, will tell a Senate panel on Wednesday.

At least 840,000 of those people would become uninsured, she wrote in prepared remarks for the Senate Small Business Committee’s hearing on the effects of the Supreme Court case King v. Burwell.

Families of people who work in small businesses are particularly at risk of feeling the potential aftershock, Blumberg wrote, because they have “disproportionately benefitted” from the law.

Healthcare experts have long warned that the loss of ObamaCare subsidies in about three dozen states would trigger an unraveling of the market nationwide.

Blumberg said that if the court rules against the Obama administration, people who lose their tax credits and are healthy would drop out of the market, disrupting the risk pool and sending the price of premiums skyrocketing across the board.

Sen. David VitterDavid VitterGOP pressures Kerry on Russia's use of Iranian airbase Louisiana needs Caroline Fayard as its new senator Louisiana Republicans: This isn’t like Sandy MORE (R-La.), the committee’s chairman, acknowledged the substantial effects that the ruling would have on small businesses during his prepared remarks.

Vitter stressed that there are alternatives to the federal government’s subsidies, pointing to “an advanceable tax credit that actually flows directly from the government into the pockets of the insurance company, not into the hands of the consumer.”

Tax subsidies – which are viewed in conservative circles as an unwanted extension of ObamaCare – have riled the Republican Party as they attempt to find a backup plan before the court rules in June.

Vitter said that option, along with others he planned to discuss at the hearing, will “help those who may be caught in the lurch if the Court sides with the plaintiff and throws down the gauntlet to the administration.”