Obamacare Raising Premiums on Struggling Small Businesses
The House Education and Workforce Committee this morning held a hearing on how individuals and small businesses will NOT be able to keep their coverage under Obamacare. One of the witnesses, a small business owner himself, testified about how the law was increasing premiums for himself and others:
Employers wishing to make plan enhancements to their limited-benefit health plan, resulting in loss of grandfathered status, have been met with 11% to 22% premium increases to accommodate the unknown usage that may occur once cost-sharing measures are removed. Although claim history will illustrate that, even when preventive care is included in limited benefit health plans, the member claim frequency is low – regardless of the strength of the benefit. However, as carriers are preparing for the unknown with removal of cost-sharing, we have seen premium increases as high as 22% for preventive care. Small employers are also at risk for premium increases due to loss of cost-sharing. As a small employer who received a 25% increase at renewal, I can strongly testify that PPACA and loss of grandfathering status can have a profound effect on certain employer groups.
This testimony revealed several essential truths about Obamacare:
- Employers are rapidly losing their pre-Obamacare coverage – as many as 70% of employers expect to lose grandfathered health status by next year – resulting in whopping premium increases to comply with the law’s new mandates (even though the most onerous mandates don’t take effect until 2014).
- “Free” preventive care is actually raising premiums significantly, because (shockingly) patients tend to consume more services with no out-of-pocket charge, yet those services still have a cost.
- The rising cost of insurance is crowding out funds that small firms could otherwise be using to grow their business – and hire more workers.
Any way you slice it, Obamacare isn’t working for Americans, and isn’t working for the American economy.