American Businesses Are Unprepared For Obamacare
July 16, 2013 by Sam Rolley
A report from the U.S. Chamber of Commerce reveals that less than two-thirds of American small businesses are prepared for the regulatory onslaught that will accompany full-scale implementation of Obamacare.
The organizationâ€™s latest quarterly survey of small businesses reveals that American entrepreneurs are growing increasingly worried that they will be unable to comply with Obamacare mandates.
â€śExcessive regulation is having a crippling effect on job growth among small businesses, as our latest small business survey makes clear,â€ť said Rob Engstrom, the Chamberâ€™s senior vice president. â€śIn fact, the only thing that scares small businesses more than the current business climate is what Washington bureaucrats will do next.â€ť
According to the results of the survey, 30 percent of American business report that they are not ready to comply with the new Obamacare rulesâ€” 25 percent donâ€™t even know what must be done to comply.
Unfortunately, the business communityâ€™s uncertainty about Obamacare will adversely affect American employment. Twenty-four percent of small business owners said they will reduce hiring or let existing employees go in order to stay below the 50-employee threshold that forces Obamacare compliance.
In June, the U.S. Chamber of Commerceâ€™s Health Care Solutions Council released a 55-page, four-part report which pointed out the ways in which Obamacare will hurt American small business.
The report outlined five major problems with the Presidentâ€™s healthcare overhaul:
- A uniform cap on out-of-pocket maximums that potentially applies to all plans and limits on deductibles imposed on small group plans. Employersâ€™ ability to vary deductibles and co-payments to encourage employees to obtain care from higher-value providers would be significantly restricted. For example, increasingly popular high deductible plans paired with health savings accounts (HSAs) would would be discouraged. (Check out the infographic about the popularity of HSAs in our last post in this series.)
- Broad requirements for â€śessential health benefits (EHBs).â€ť If EHBs are interpreted to include generous coverage for costly services where less expensive but effective alternative treatments or providers exist, premiums will rise significantly.
- A prohibition on plans with an actuarial value less than 60%. The EHB requirements and the 60% actuarial value threshold are expected to increase premiums by an average of 11.5% to 25.5% across states.
- Broad prohibition on any cost-sharing for preventive services. Though prevention is an essential part of high-value health care, requiring that all â€śpreventiveâ€ť services for all people have zero dollar co-payments will drive up costs.
- Broad underwriting restrictions and new community rating requirements. With broad prohibitions on underwriting individuals will have little reason to remain continuously enrolled in coverage, even when they are at risk of worse health or they change jobs, since they will be guaranteed an issuance of coverage. Â Without good reasons to stay continuously enrolled in coverage, people with lower health risks may drop out. A recent Milliman study projects that premiums will increase 20% to 45% on average in state individual exchanges.