The Affordable Care Act (ACA) is nothing if not resilient in the face of uncertainty. After all, the law is still providing quality, affordable health coverage for millions of small businesses and small-business employees despite two years of relentless attacks by the Trump administration and its allies.
Now that a federal judge in Texas has said the law is unconstitutional, however, I’m wondering how much more instability the ACA can take before premiums rise to levels that price small firms like mine out of the market.
I’ve offered health coverage to my employees almost from the day I opened Hobby Works in 1992. Although my business has been successful, I found it difficult to offer health insurance to my workers before the ACA.
Prior to the health-care law, my business faced annual premium increases of 15-20 percent or more. As a result, we had to ask employees to pay more of their own premiums and face higher deductibles in order to continue offering them coverage.
Once the ACA’s provisions started going into effect however, our rates started improving. In fact, we experienced increases of only 7-8 percent on average.
I know many other small-business owners struggled before the ACA, too. Prior to the law’s enactment, small businesses and their employees represented a disproportionate share of uninsured workers.
In 2013, more than 28 percent of small-business employees were uninsured, while nearly 3 in 10 self-employed entrepreneurs were uninsured. By 2017, however, only 19.4 percent of small-business employees were uninsured, and as of 2016 the uninsured rate for solo entrepreneurs fell by 35 percent.
Small-business owners also paid almost 20 percent more on average for coverage than their big-business counterparts, usually for less-comprehensive coverage. Since 2010, however, the growth in small-business health-care costs slowed dramatically, following regular double-digit increases prior to the law’s enactment.
Because the law makes it much easier for the self-employed to obtain their own coverage, many more aspiring entrepreneurs have escaped “job lock” and have been willing to go out on their own to start new ventures.
Thanks to these massive cost reductions, more than 5.7 million small-business employees or self-employed workers are enrolled in the ACA marketplaces, and more than half of all ACA marketplace enrollees nationwide are small-business owners, self-employed individuals or small-business employees.
Unfortunately, the decision in Texas v. United States is just the latest example of efforts to destabilize the ACA, including slashing marketing and outreach for open enrollment, ending the individual mandate and expanding short-term insurance plans.
All of these efforts combined could encourage large numbers of consumers, particularly those who are younger or healthier, to leave the ACA marketplaces. Many of the customers left behind in the marketplaces, including small businesses, would be forced to pay more for the quality coverage they receive now. Sadly, many would be unable to afford that level of care.
Ending the ACA would be a disaster for America’s entrepreneurs because it would cause a rapid rise in health-care costs, leading to substantial economic instability. For the good of America’s job creators, the constitutionality of the ACA must be upheld, and I hope this terrible decision out of Texas is quickly appealed and overturned.
Mike Brey is president of Hobby Works and a member of Small Business Majority’s Small Business Council.