Now that the new Republican-led Congress is in session, we knew it wouldn't be long before real attempts began in earnest to repeal or starve the new health care law. And on January 19, the Republican-led House in fact voted to repeal it.
Of course, the battle isn't over. The Senate is still in the hands of the Democrats, many of whom went out on a limb to pass the landmark legislation. And similarly, any direct attempt to turn back the law would be vetoed by President Obama. So, while any frontal assault would necessarily fail, the backdoor strategy was indicated by Mitt Romney is a speech last year: “We can clamp down on this bill... by not funding it.”
So, would repealing the new law help or hurt small business?
It would definitely hurt more than help.
Now, don’t get me wrong, we all know this is a flawed piece of legislation. The bill was too big, too complex, and the process of passing it made us all understand that old saw about how it’s better to not watch how sausage and laws are made.
But repealing the Patient Protection and Affordable Care Act would be a big mistake. The alternative -- no law at all -- would be much worse. Here’s why:
For at least 50 years, legislators and the public have known that our health care system, while good (though nowhere near the “best in the world”), needed fixing. Doctors are financially rewarded more for when people were sick than healthy, they order too many tests because they are afraid of lawsuits, premiums consequently skyrocket, millions are uninsured, and those with pre-existing conditions could not get coverage.
The status quo stunk, big time, especially for small business. Consider these sobering statistics:
- Only 49 percent of businesses with three to nine employees (most small businesses) offered any type of health insurance to their employees in 2008, down from 58 percent 10 years before.
- At small businesses with 25 employees or fewer, 29 percent offered no insurance at allin 2007; a number that is definitely higher today.
So, when you talk about the uninsured, you are talking about people who work for small businesses. Why? Premium increases make insuring employees increasingly difficult.
Something had to change. The new law, albeit flawed, attempts to fix many of these inequities (by the way, did you know it was based on Republican proposals in the mid-90s?)
Here’s why it’s worth keeping:
1. It makes buying insurance more affordable: This is reason No. 1 for a reason. According to Healthcare.gov, “If you have fewer than 25 employees and provide health insurance you may qualify for a small business tax credit of up to 35% to offset the cost of your insurance. This will make the cost of providing insurance much lower.”
That is exactly what the doctor ordered. To learn more, go here.
2. Creation of insurance exchanges: Last year, in an attempt to keep our premiums somewhat reasonable, my business increased our deductible significantly. The coverage still jumped by 18 percent. This year? Let’s not talk about it.
One of the main reasons health insurance is so expensive for small business is that we insure such a small pool of people. Large corporations can get better rates because they are able to spread the risk around to so many more people. We can’t do that.
To address this, starting in 2014, the new law mandates that states create purchasing pools called exchanges. By allowing small businesses to band together to buy insurance, by creating competition for their business, and by allowing those small businesses to compare policies across the board, these exchanges will promote competition and rates should be better contained.
Another benefit of the creation of state insurance exchanges is that they will foster more movement of qualified employees to small business. Since there will be better coverage at small businesses once the exchanges come online, the so-called “job lock” -- where people don’t leave jobs for fear of losing their insurance -- should disappear.
Even members of Congress will be using the exchanges for their insurance by 2014.
3. The individual mandate: By the same token, the individual mandate to buy insurance will also help contain costs because:
a. We pay for the uninsured's medical coverage anyway, only it is the most expensive type possible -- emergency care.
b. Increasing the pool of insureds decreases the risk.
4. No more pre-existing conditions: Aside from just being the right policy, it also promotes entrepreneurship. Under the old rules, if someone wanted to start a business but had both a job and a pre-existing condition, they would likely stay at the job rather than take the risk on the new venture as they knew that at least they would have health insurance with their job.
By ridding our country of the onerous pre-existing condition condition, we open up the doors of entrepreneurship for millions of people.
Plenty of people will vehemently disagree with me on this issue, and that’s fine. Give me your best shot.
Image credit: Vinoth Chandar