Woe is us, my small business brethren. The Affordable Care Act is eminent and a small business apocalypse is creeping in on little cat’s feet. And lo, while it cometh under the benign name of the Affordable Care Act, it is better known under the more sinister sobriquet of Obamacare.
As a society we are about to succumb to the most rococo, convoluted, slovenly written major law in American history; a law that is packed with sneaked-in surprises, inefficient bureaucracy (over 160 new government entities and counting), up to a two trillion dollar increase in healthcare cost, and a loss of 800,000 jobs (both figures estimates from the non-partisan Congressional Budget Office.) Premiums will be going up at least 12% and, for single adults under 30, they will go up 46%, according to the American Academy of Actuaries.
But wait. It gets better. To make a profit with the added services mandated, existing policies in most of the small group and individual insurance markets will be forced to create much more restrictive networks, possibly separating you from your personal physician (which we were assured would never happen under this act.)
Nancy Pelosi famously told us we had to pass Obamacare to find out what’s in it. Well, finding out we are. Even the most left wing Democrats are voicing buyer’s remorse. Democratic Senator Jay Rockefeller, a key proponent, now calls the ACA “beyond comprehension”, and Democratic Senator Max Baucus calls it “a train wreck.” And, get this, Henry Chao, who is the Obama administration’s own head of ACA implementation, states frankly, “I’m pretty nervous…Let’s just pray it’s not a third world experience.” Not very reassuring, Henry.
But the worst mandates in the ACA place a bull’s eye on the back of the entrepreneur and small businessman. It is an unholy madness aimed straight at us. It is a flat out disincentive to grow our companies and thereby grow the American economy. Expansion now becomes expensive for the 500,000 US businesses with fewer than 100 employees. For example, a company with 49 employees doesn’t provide health benefits. Hiring just one more worker triggers a mandate to cover all workers or pay a tax penalty ($2000/worker). Just how likely is that 50th worker to be employed? Or, if a small business has more than 50, isn’t the company much more likely to fire workers or make them part-time? I predict huge amounts of entrepreneurial energy and creativity will be syphoned into avoiding expansion requiring new employees.
In a recent study by Mercer, a growing number of entrepreneurs will employ this exact strategy. Journalist Michael Tanner, in a recent article, points out that in France, another country where numerous government regulations kick in at 50 workers, there are 1500 companies with 48 employees and 1,600 with 49 employers, but only 500 with 51. (Michael Tanner, NY Post, 11/18/12, p. 27)
Can this non-comprehensible 2,000 page plus new system (ACA) actually be put in place in 2014 without throwing healthcare into utter chaos? To my thinking, no.
I have lawyer friends with employment specialties who are licking their chops at the tort possibilities in the impending confusion. And to whom will their torts often be directed at? You and me, brothers and sisters; we, who can ill afford a full-time lawyer to parse the particulars of the ACA. I predict a veritable Obamacare tortfest beginning in 2014.
Donald Trump, comb over and ego aside, warns, “I support health care for people. I want people well taken care of. But I also want health care that we can afford as a country. I have people and friends closing down their businesses because of Obamacare.” Thanks for sharing, Donald. Would that it were not so.