For Immediate Release
Washington, DC (March 19, 2015) — Five years of data on how small business owners are dealing with the Affordable Care Act show that large majorities are disappointed and that its predicted benefits for local employers were far off the mark.
“The problems that many predicted have arrived but most of the promises for small business owners remain unfulfilled,” said NFIB Research Director Holly Wade, who testified this morning before the Senate Finance Committee at a hearing to assess the real effects of the health care law.
Wade pointed out that the law is just as restrictive and confusing as its detractors predicted. Ten percent of small business owners had their personal insurance plans cancelled last year, for example, something the President and others promised wouldn’t happen when they were pushing the law through Congress. Twelve percent of owners renewed their old plans early in order to avoid higher premiums and narrower choices, two results that were also not part of the deal.
Most disappointing, according to Wade, is that a large majority of small business owners report higher premiums despite the fact that the law was billed as a way for them to reduce their expenses.
“We found that 62 percent of small business owners are paying higher premiums while only eight percent say their costs have dropped,” she said. “A big part of the President’s sales pitch for the law was that it would help small businesses save money on their health insurance. Five years later, a substantial majority of small business owners are reporting the opposite result.”
What about the SHOP Exchange and small business tax credits that were supposed to soften the impact of the taxes and mandates and make things generally easier for local employers to purchase insurance?
“It’s been difficult for us to find very many small business owners who have purchased insurance through the SHOP Exchange,” said Wade. “Almost no one is using the system and that’s evident from the administration’s own enrollment numbers.”
The tax credits, she said, which were supposed to create an incentive for small employers to cover their workers, also have been ineffective.
“Qualifying for the credits is cumbersome and complicated,” she said. “The tax credit is temporary but the mandate is forever, so the financial advantage is very small over the long run. It’s certainly not enough to offset the higher costs and the administrative headaches that the law imposes on small business owners.”
President Obama and supporters of law point out that millions of Americans who didn’t have insurance are now receiving subsidies to buy coverage. That, they say, shows that the ACA is a success.
“But that’s not the way the President and Congress defined success when they were debating the law,” said Wade. “The ACA was sold to the country as a way to reduce the cost of insurance for everyone and as a way to make the system work better for everyone. And they put a heavy emphasis on the advantages for American small businesses.
“Based on the data and our experience with the law, most of that seems to have been greatly overstated,” she continued.