Is Obamacare good for small businesses?

Jim Blasingame

The Patient Protection and Affordable Care Act, aka Obamacare, was passed by Congress and signed into law by President Obama two years ago. It was considered the signature accomplishment of the president’s first term.

Obamacare was hailed as comprehensive health care reform that would not increase the deficit and would solve rising insurance costs for small businesses. Two years hence, here is evidence that seem to refute these claims.

  • The initial price tag for Obamacare was $940 billion over 10 years. The Congressional Budget Office (CBO) recently reported the new estimate to be $1.76 trillion over 10 years, almost doubling the original claim.

  • Instead of the lower insurance costs small businesses were promised, the non-partisan Congressional Budget Office expects costs for small group and individual insurance purchasers to rise faster now than without Obamacare. And according to the Galen Institute, Obamacare’s early mandates contributed to employer costs rising three times faster last year than they did the year before.

  • There are at least two parts of Obamacare that are causing small businesses to restrict growth plans and rethink compensation models and employment structure in anticipation of these provisions.
    • The employer mandate requires small businesses with more than 49 employees to provide “government-approved” health insurance or face a $2000 fine per employee, after the first 30. The employer mandate does not apply to part-time employees.

    • Obamacare does include tax credits for employers with fewer than 50 employees, but as the number of full-time employees and average compensation increases, the credits decrease. These provisions seem to be at cross-purposes with much needed jobs and income growth. Also, even if the individual mandate currently being considered by the Supreme Court is struck down, the employer mandate and tax credit restrictions would still apply.

  • We wanted to know how small business owners feel about Obamacare, so in our online poll recently, we asked this question with three possible answers: “On the 2nd anniversary of Obamacare, where do you stand on this law?” Twelve percent of respondents chose, “I like it and think it will be good for America,” while those who were “Undecided,” represented 10% of our sample. But the rest, 78%, said “I don’t like it and think it should be repealed.”

Write this on a rock... Obamacare is contributing to the economic uncertainty that small business owners are feeling.


Jim Blasingame is creator and host of the Small Business Advocate Show. Copyright 2012, author retains ownership. All Rights Reserved.

Print page