Save Small Business From ObamaCare

Association health plans would give them the same options as big companies.

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Washington, March 20, 2017 | comments

CLICK HERE to read article in Wall Street Journal.

Aetna’s chief executive, Mark Bertolini, didn’t mince words in February when he said the Affordable Care Act, commonly known as Obamacare, is in a death spiral.  It is because this bad health care law is failing that we are debating how best to repeal and replace it.  But in the midst of this debate, it’s important to remember who Obamacare is hurting on an everyday basis.  It is their stories that inspire patient-centered, commonsense solutions.    


Kathy is a small business owner from Missouri who is struggling under Obamacare.  Before the current health care law, she would receive a 2-inch notebook containing multiple quotes from different health insurance companies. Now, options for her business are listed on a single legal sized sheet of paper.  In fact, for 2017 she only received three quotes, two of which were adequate for her region.  And while options are dwindling, costs are rising and fewer folks are covered.  In 2013, her company’s insurance cost $180,000 for 92 individuals with a $2,000 deductible.  In 2016, her company paid $252,000 but for just 61 individuals with a $5,000 deductible.


This story is unfortunately not unique.  Obamacare’s costly regulations continue to hurt small businesses, and many owners must make hard choices between cutting back employee’s hours, laying off staff, or dropping health care coverage (with a penalty for doing so if there are 50 or more employees).  Since 2008 the number of small businesses with fewer than 10 employees offering health insurance has fallen from 35.6 percent to 22.7 percent (Employee Benefit Research Institute). 


Even worse, the American Action Forum found that since Obamacare became law, “among small businesses, the rise in premiums has been associated with $19 billion in lost wages, 10,130 fewer business establishments, and nearly 300,000 lost jobs.”


This is a big problem for American families, particularly when small businesses make up 55% of all jobs and 66% of all net new jobs (Small Business Association).


While repealing Obamacare is necessary and would certainly help small businesses grow and hire new workers, we must also do what we can to help these job creators provide affordable health care options to their employees. 


Therefore, in an effort to help hardworking American families, we introduced the Small Business Health Fairness Act (H.R. 1101), which the House of Representatives is scheduled to vote on this week.  It would allow small businesses to band together through association health plans (AHPs) in order to provide quality health care for workers and their families at a lower cost.


The Small Business Health Fairness Act is built on the basic rule of insurance: the bigger the risk pool, the lower the cost to those in the pool.  This is why larger corporations and unions are better able to provide quality, affordable health care to their employees.  In order to level the playing field in terms of cost and options, H.R. 1101 would allow small mom and pop businesses to band together through AHPs so that they are able to take advantage of the same strength in numbers for the purpose of purchasing health care.


AHPs could function in one or two ways: 1) they could work directly with an insurer to negotiate better rates, or 2) they could self-fund, just as many large corporations and labor unions already do.  Self-funded plans would also be exempted from many costly state and federal requirements, just like many large corporations and labor unions.


To ensure the success and fairness of AHPs, our bill has a number of important requirements to provide accountability, stability, and consistency across the country.


Another key component of our bill is the requirement that any active marketing must include all member employers, regardless of the claims history or health status of employees.  AHPs would also be restricted from setting premiums in a way that might force higher claims companies to pay higher premiums than other similarly situated employers in the plan.


It’s time to give small business owners the opportunity to offer their employees affordable health care, just like large corporations and labor unions. 


As House Republicans work to repeal Obamacare and alleviate the burden it places on Americans across the country, we are thrilled that AHPs can be a central part of the broader replacement effort.  We look forward to the House-passage of this important and commonsense solution to provide better access to affordable health care for small business workers – something all Americans want, need, and deserve. 




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