Over the past seven years, Republicans voted to repeal the Affordable Care Act (ACA) 62 times, yet were not able to come up with a replacement — until March 8. The House Republican replacement for ObamaCare, dubbed the American Health Care Act (AHCA) is a poor substitute. It’s full of contradictions and exceptions, all of which exacerbate the rising cost of health care. It will cut taxes for the wealthy, return control to the insurance companies, and increase the number of uninsured.
Small businesses will be major losers in this deal. Prior to the passage of the ACA, small businesses faced profound disadvantages in the health insurance marketplace. At that time, more than half the uninsured in the United States were small business owners, their employees, and families. Small businesses that purchased insurance plans paid 18 percent more per employee than larger firms. Lifetime limits and limits on preexisting conditions were common. It only took one health crisis to put a struggling sole proprietor out of business.
In 2014, the U.S. Census Bureau totaled 5.7 million businesses in the United States. More than 95 percent of these firms are small enough that they face no health insurance mandate under the Affordable Care Act. Small business employers and employees can obtain individual insurance on the exchanges at subsidized rates. This is particularly important for the smallest of small businesses. For firms with fewer than 25 employees, ACA also provides generous tax credits for owners who want to provide health insurance for their employees. In addition, businesses with fewer than 50 employees can access optional group health coverage at favorable rates. Both of these systems are proposed to disappear under the ACHA.
In a small business, it is a big deal when one employee is repeatedly sick because they can’t afford health treatment or medication. If sick employees come to work anyway — as most do — other employees can also get sick. In a restaurant, a lawncare business, or an auto shop, these kinds of challenges can wreak havoc. The AHCA will repeal the ACA’s requirement that insurance companies provide essential free preventive care. For small businesses — and for American taxpayers — this change is a bad deal. These simple and inexpensive measures keep healthcare costs down and keep employees coming to work.
Throughout the Obama years, mental health and substance abuse treatment were among the few issues with strong support across the aisle. The 21st Century Cures Act, passed in 2016, was a landmark bill approved by majorities of both Democratic and Republican legislators in both houses of Congress. The AHCA will remove the requirement that insurance plans offer either mental health or substance abuse treatment. This is another misguided proposal whose burden will fall disproportionately on small business. The National Institute of Health rates depression as the third highest cause of workplace productivity loss. Alcohol and other drugs also have a disproportionate impact on small business productivity.
The repeal of ObamaCare would take us back to the bad old days when big corporations negotiated low rates for themselves while small businesses paid top dollar. It would take us back to the days of double-digit cost increases without recourse every year. And it would return us to the time when fledgling small business proprietors lived in the shadow of bankruptcy from one unexpected illness.
If Congress and the Trump administration truly want to help small business, they should build on the ACA, not repeal it. For example, they should simplify the enrollment system for small businesses and their employees. They could reduce costs with innovations like value-based payment, accountable care organizations, and allowing the government to negotiate for the costs of medication and medical services. Expanding coverage even further and expanding services to improve public health will not only reduce overall healthcare costs, but provide all businesses with employees who are healthy and ready for work.
Small business owners know our employees. We know their spouses and their children. We are proud of the role we play in our communities. We want to be good employers and good citizens. As long as the cost of healthcare is affordable, we want to provide it to all our employees.
The views expressed by contributors are their own and are not the views of The Hill.