David Brodwin is a cofounder and board member of American Sustainable Business Council. Follow him on Twitter at @davidbrodwin.
Thirty-three states in the United States have hesitated to implement the Affordable Care Act, also called Obamacare. They have not done the staff work to decide whether to offer their own state-level health insurance exchange (for those who are not covered by employer plans) or whether to participate in an exchange plan run by the federal government. Time has run out. The deadline for them to decide is today (November 16, 2012.) Governors and state legislatures need to stop procrastinating and start implementing, or their businesses—both large and small—will suffer.
How Obamacare Helps Small Business
Obamacare goes a long way to help small business lower their costs. Right now, small businesses are in an extremely difficult position due to soaring costs of healthcare. Small businesses don't have the same purchasing power as large businesses; they pay on average about 18 percent more for equivalent coverage. Their costs go up by double digits every year. As a result, they suffer a major competitive disadvantage. Most small business owners want to provide healthcare to their employees. Owners know that employees with coverage work more productively, with fewer distractions and less stress. But the current health insurance system does not serve small business well.
The Affordable Care Act helps small business in several ways, while giving most small businesses the ability to ignore the new rules if they wish. The act gives small businesses (up to 100 employees) the opportunity to purchase their coverage through insurance exchanges, run at the state or federal level. These exchanges will start operating in 2014 and will provide small business with the same negotiating power and discounts that big businesses enjoy today. This will cut costs, boost profit, and promote hiring.
Further, the Affordable Care Act provides tax credits to those small businesses (those with up to 25 employees) that do purchase healthcare coverage. These credits will cover up to 35 percent of the cost now, going up to 50 percent in 2014. This will significantly lower their costs.
Finally, if a small businesses doesn't want to participate in an exchange or purchase coverage on its own, it doesn't need to. Companies with fewer than 50 employees are exempt from the requirement to provide coverage. In that case, individual employees will be able to buy insurance through the exchanges.
States are Dragging their Feet
Even though the Affordable Care Act provides small business with both exchanges and tax credits to reduce their insurance costs, many states have yet to start working on their programs. Most of the foot-dragging states are controlled by Republican governors and/or legislatures. They made the bet that Obama would lose, and Obamacare would be repealed. Now, with the election over, it's clear that Obamacare will prevail, helping most small businesses, as well as uninsured invidivudals.
How Affordable Care Act helps the Economy
The Affordable Care Act will help strengthen our still-weak economy. By closing the coverage gaps that currently leave 40-50 million Americans uninsured or badly underinsured, the act enables people to be more productive and focused when they're at work. By taking high health insurance costs off the back of small business, the act helps U.S. companies to compete with companies that operate in countries where healthcare is free. By taking the first steps toward rationalizing the healthcare delivery structure, the act will start to wring excessive healthcare costs out of the system. Today the U.S. healthcare system costs about 18 percent of GDP compared to 10-12 percent in most of the countries with whom we compete. That difference puts the United States at a severe competitive disadvantage, without delivering any corresponding increase in lifespan or health.
It's time to move on
The fight over the affordable care act has gone on far too long. With both the election and the Supreme Court challenge behind us, it's time to forge ahead with implementation. Most healthcare providers and many business groups want to see states get busy with designing and building viable exchanges. Even many groups that traditionally resist the federal government are getting on board because they see the benefit of crafting unique state-level solutions that are tailored to state-level needs. But resistance continues, largely from those who still seek to kill the whole program, or to make the program fail in its implementation. This entrenched, uncompromising resistance is the enemy of economic progress, of human compassion, and of common sense.
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