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American Businesses Are Unprepared For Obamacare

July 16, 2013 by  

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 organization’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.

“Excessive regulation is having a crippling effect on job growth among small businesses, as our latest small business survey makes clear,” said Rob Engstrom, the Chamber’s senior vice president. “In fact, the only thing that scares small businesses more than the current business climate is what Washington bureaucrats will do next.”

According to the results of the survey, 30 percent of American business report that they are not ready to comply with the new Obamacare rules— 25 percent don’t even know what must be done to comply.

Unfortunately, the business community’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 Commerce’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 President’s healthcare overhaul:

  1. A uniform cap on out-of-pocket maximums that potentially applies to all plans and limits on deductibles imposed on small group plans. Employers’ 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.)
  1. Broad requirements for “essential health benefits (EHBs).” 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.
  1. 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.
  1. Broad prohibition on any cost-sharing for preventive services. Though prevention is an essential part of high-value health care, requiring that all “preventive” services for all people have zero dollar co-payments will drive up costs.
  1. 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.  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.


Sam Rolley

Staff writer Sam Rolley began a career in journalism working for a small town newspaper while seeking a B.A. in English. After learning about many of the biases present in most modern newsrooms, Rolley became determined to find a position in journalism that would allow him to combat the unsavory image that the news industry has gained. He is dedicated to seeking the truth and exposing the lies disseminated by the mainstream media at the behest of their corporate masters, special interest groups and information gatekeepers.

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  • Bill

    It is simple math;
    Impose costly regulation and higher taxes on business and they will either outsource, hire less people, lay off workers, relocate to a more business friendly environment or close their doors
    It is not an answer to increase job growth and the economy
    Taiwan, Hong Kong and Thailand have public health systems. The big difference is that they promote private sector growth to have the extra funds to pay for it
    The private sector is the goose that lays the golden eggs to pay for all the extra freebies. Hong Kong does it with only having ONE flat tax of 15% for individuals and 17% for business’s. That is smart planning. We are doing it bassackwards and it is destined for failure

  • karl

    I’ve said for a long time that OUR plan combines the very worst aspects of socialism and capitalism. I say that because only the health care establishment and Big Pharma actually make out in the deal – everyone else gets screwed. Even the doctors are screaming about this!!


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