Obamacare’s Bloodletting of Small Business

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Small businesses – the bread and butter of our communities, provide “55% of all jobs and 66% of all net new jobs since the 1970s,” according to the Small Business Administration. Yet, the President’s signature legislation – Obamacare – has caused hardships for many of them as owners and employees alike face policy cancellations, increased premiums and the impact to their bottom line.

Skip, a self-employed small business owner in Pennsylvania, has seen firsthand how some are taking a financial hit due to the so-called Affordable Care Act.

“I purchase my health insurance through an alliance of small business owners. I have a $3,500 deductible plan to reduce the costs. I am a healthy male with low-risk behaviors. Since Obamacare passed, my premiums have been increased twice, from $371 per month to $544.91 per month. Almost 10% of my income goes to a product I don’t even get to use because of the high deductible,” explained Skip.

Being the only employee, Skip does not have to worry about the new healthcare law adversely affecting anyone else in his company. However, it is a different story for Jim Wolff, owner of a Pennsylvania car dealership, who had to stop providing insurance for his 11 workers.

“Foreign Traffic, a car dealership in Hampton, will stop offering its employees health insurance at the end of the year and send them to the exchange being set up under the Affordable Care Act.

Owner Jim Wolff said he had no choice, after providing the benefit for 35 years, because his insurer informed him it would raise premiums in 2014 by 43%. But the company will give its 11 workers money each year to offset some of the cost of buying their own insurance.

“We’re just done with it,” he said. “We’re not going to pay the increases from the plan that we had.”

As if 2013 wasn’t bad enough, there is a second wave of pandemonium, which is set to hit this fall.

“I have run into a number of people who have had their insurance plans cancelled, because it did not meet the guideline for Obamacare,” shared Skip, who is concerned about the fate of his plan, and rightly so.

An analysis by American Enterprise Institute shows 2013 was only a small foreshadowing of what is to come.

“A new and independent analysis of Obamacare warns of a ticking time bomb, predicting a second wave of 50 million to 100 million insurance policy cancellations next fall — right before the mid-term elections. The next round of cancellations and premium hikes is expected to hit employees, particularly of small businesses.”

Politico further points out why businesses will be facing rising healthcare costs.

“Next year, small-business health plans — those that cover 50 or fewer workers — will have to comply with a wide range of new rules, particularly the ones that say the businesses can’t be charged more if their workers have health problems. Their premiums will vary based only on the workers’ ages, whether they have individual or family coverage, what part of the country they live in, and whether they use tobacco — and older workers won’t be able to be charged more than three times as much as younger ones.”

While he is hoping to be able to keep his plan, Skip anticipates seeing an increase in his premiums again. “Obamacare is not going to save people money – it’s going to cost them more,” he vented.

Like the old blues song states, ‘people get ready, there’s a train (wreck) a-coming.’