Small Businesses Bearing the Burden of the Government Takeover of Healthcare

New Study Shows Healthcare Takeover Will Force Workers Into Government-Run Insurance System

• A survey released recently found that a majority of small business owners believe the government takeover of healthcare will cause many small businesses to drop coverage for their employees, adding to the law’s growing list of broken promises.
• This comes about a month after a similar study found that many companies offering health insurance would likely be forced to drop coverage after 2014, the year the government takeover of healthcare takes full effect, and shift workers into the government-run healthcare exchanges created by the law.
• Now families and job creators are finding out what’s in Nancy Pelosi’s healthcare law, and all they see is bad news and broken promises.

A survey released recently by the National Federation of Independent Business (NFIB) found that a majority of small business owners believe the government takeover of healthcare will cause many small businesses to drop coverage for their employees, adding to the law’s growing list of broken promises: 

OBAMA PROMISED THAT “IF YOU LIKE YOUR DOCTOR, YOU’RE GOING TO BE ABLE TO KEEP YOUR DOCTOR. IF YOU LIKE YOUR PLAN, KEEP YOUR PLAN.”(“Obama’s Speech on Health Care Reform,” Real Clear Politics, 3/19/2010)

PROMISE BROKEN: NFIB SAYS 57 PERCENT OF SMALL BUSINESSES “VERY” OR “SOMEWHAT LIKELY” TO DROP COVERAGE FOR EMPLOYEES. “Should employees begin to leave for an exchange, 26 percent of currently offering small employers are very likely to explore dropping their health insurance plans and another 31 percent are somewhat likely to do so.” (“Small Business and Health Insurance: One Year After Enactment of PPACA,” NFIB Research Foundation, July 2011)

THE GOVERNMENT HEALTHCARE TAKEOVER IS THE REASON FOR DROPPING COVERAGE:“Dennis said the NFIB was ‘not aware of any data that suggested’ insurers had dropped coverage of small businesses in such large numbers in years before the passage of the health law. For this reason, they felt confident the health law was the cause, he said.” (Bara Vaida, “Some Small Businesses Say Health Insurers Are Dropping Their Coverage,” Kaiser Health News, 7/25/2011)

“FLIGHT TO THE EXCHANGES” ALREADY HAPPENING, DESTABILIZING INSURANCE MARKET: “About two of five small companies sponsor insurance—a share that, according to NFIB, has on net held mostly stable or declined very slightly since the passage of the Affordable Care Act. Yet 12% of these companies—one of eight—have either had their plans cancelled or have been told that they will be in the future. This churn in the private small-group market is a direct result of ObamaCare’s new rules and mandates—but a far larger destabilization could be in the offing, what Mr. Dennis calls ‘the flight to the exchanges.’” (Editorial, “ ‘The Flight to the Exchanges,’” The Wall Street Journal, 7/27/2011) 

This comes about a month after a similar study found that many companies offering health insurance would likely be forced to drop coverage after 2014, the year the government takeover of healthcare takes full effect, and shift workers into the government-run healthcare exchanges created by the law:

MCKINSEY STUDY FOUND THAT 30% OF LARGE COMPANIES WOULD “DEFINITELY” OR “PROBABLY” DROP COVERAGE AFTER 2014. (Employer Survey on US Healthcare Reform,” McKinsey and Company, 6/20/2011)

AMONG EMPLOYERS WITH “HIGH AWARENESS” OF HEALTHCARE LAW, UP TO 60 PERCENT WILL DEFINITELY OR PROBABLY DROP COVERAGE: “Among employers with a high awareness of reform, this proportion increases to more than 50 percent, and upward of 60 percent will pursue some alternative to traditional ESI [Employer-sponsored insurance].” (“Employer Survey on US Healthcare Reform,” McKinsey and Company, 6/20/2011)

DEMOCRATS IN DENIAL: WHITE HOUSE ATTACKED MCKINSEY FOR DISAGREEING WITH THEIR ROSY PREDICTIONS: “Over at the White House’s official blog, Nancy-Ann DeParle attempted to claim that ‘the McKinsey study is an outlier.’ She cites studies from RAND, the Urban Institute, and Mercer to support her case. But the great irony is that the Urban Institute was one of the first institutions to highlight the problem of employer dumping under Obamacare. As I discussed in this blog post, according to a paper from the Urban Institute, ‘tens of millions [of employees] are likely to shift out of employer-provided insurance over the next decade or two.’ Other studies have found the same: former Congressional Budget Office Director Douglas Holtz-Eakin has done quite a bit of work on the subject.” (Avik Roy, “The McKinsey Health Insurance Study: Democrats Strike Back,” Forbes, 7/11/2011) 

Nancy Pelosi famously said Democrats would have to pass their government takeover of healthcare so we could “find out what’s in it.” Now families and job creators are finding out, and all they see are bad news and broken promises: increasing healthcare costs, rising taxes and widening deficits:

CMS: GOVERNMENT HEALTHCARE TAKEOVER WILL “CREATE A WHOLE NEW WORLD OF HEALTHCARE SPENDING”: “The Affordable Care Act will drive health care spending up slightly, to nearly a fifth of the country’s gross domestic product by 2020… If implemented as written, the health care law will ‘create a whole new world of health care spending,’ Foster said.” (Brett Norman, “Report: Health Law Will Raise Spending,” Politico, 7/28/2011)

TAX CREDIT PROVIDES “VIRTUALLY NO INCENTIVE” TO PROVIDE HEALTH INSURANCE: “According to NFIB calculations only 245,000 small businesses qualify for the full credit under these criteria. Worse, the credit only lasts four years. The NFIB says the credit ‘provides virtually no incentive for non-offering firms to purchase health insurance.’” (Conn Carroll, “Over 75% of small businesses say Obamacare will cause higher taxes,” Washington Examiner, 7/26/2011)

HEALTHCARE TAKEOVER WON’T ENCOURAGE EMPLOYERS TO PROVIDE COVERAGE: “PPACA will not encourage non-offering employers to begin providing coverage; nearly 87 percent of non-offering employers say they are either ‘not too likely’ or ‘not at all likely’ to be offering coverage a year from now, suggesting that the law’s incentives to providing coverage are ineffective.”(“PPACA One Year Later: Small-Business Owners Expect Costs to Rise,” National Federation of Independent Business, 7/25/2011)

THE SMALL BUSINESSES CURRENTLY OFFERING HEALTH INSURANCE ARE MOST “PESSIMISTIC” ABOUT LAW’S “PROJECTED OUTCOMES”:  “Those offering employee health insurance are notably more pessimistic about the new law’s projected outcomes. … By overwhelming margins, small employers who have some knowledge of the new law think that PPACA will not reduce the rate of health care (insurance) cost increases, will not reduce the administrative burden, will increasetaxes, and will add to the federal deficit.” (“Small Business and Health Insurance: One Year After Enactment of PPACA,” NFIB Research Foundation, July 2011) 

65% OF SMALL BUSINESSES THINK HEALTHCARE LAW WON’T SLOW THE COST OF INSURANCE COST INCREASES. (“Small Business and Health Insurance: One Year After Enactment of PPACA,” NFIB Research Foundation, July 2011) 

79% SAY GOVERNMENT HEALTHCARE TAKEOVER WILL NOT “REDUCE PAPERWORK AND MAKE PROVISION OF HEALTHCARE LESS COMPLEX.”  (“Small Business and Health Insurance: One Year After Enactment of PPACA,” NFIB Research Foundation, July 2011) 

71% SAY IT WILL “ADD TO FEDERAL BUDGET DEFICIT.” (“Small Business and Health Insurance: One Year After Enactment of PPACA,” NFIB Research Foundation, July 2011) 

77% THINK LAW WILL INCREASE TAXES. (“Small Business and Health Insurance: One Year After Enactment of PPACA,” NFIB Research Foundation, July 2011) 

WHILE WHITE HOUSE DENIES NORTH DAKOTA ITS WAIVER REQUEST, INTERFERING WITH ATTEMPTS TO ATTRACT INSURERS TO THE STATE. (Rebecca Beitsch, “North Dakota Denied Health Care Reform Waiver,” The Bismarck Tribune, 7/25/2011)