One in eight small businesses get insurance cancellations after ObamaCare passage

posted at 7:18 pm on July 26, 2011 by Ed Morrissey

Let’s take a breather from Barack Obama’s failure to lead on the debt crisis to his failed signature policy of ObamaCare.  Despite his promise that passage of the health-insurance overhaul bill would allow people to keep their current health insurance, a new report from the National Federation of Independent Business shows that one in eight small businesses have had to stop offering insurance to their employees.  The Daily Caller notes that the change has not been voluntary:

Among the most striking of NFIB’s findings was the number of employer health insurance plans that have been or will be eliminated since PPACA’s passage — 14 percent, or one in eight. Eliminating employer health care plans “is the first major consequence of PPACA that small-business owners likely feel,” the report said.

“We are not aware of any data suggesting we’ve had turnover anywhere near this level in the past,” said William J. Dennis, a senior research fellow at the National Federation for Independent Business.

The NFIB study also found 20 percent of small employers expect to significantly change their benefit packages the next time they renew their health insurance plans. Almost all of them expected to see diminished benefits, increased employee costs, or both.

The report makes clear that the change has mainly been imposed on small businesses.  Left on their own, they would have continued coverage, but in response to ObamaCare, insurers have curtailed the plans offered to smaller employers:

The considerable changes expected are in part prodded by plans that have effectively been eliminated by insurers.  One of the great “promises” of PPACA supporters was that insured people would be able to keep their current health insurance plan. As a practical matter that has not been true for a substantial number of small employers and their employees. Since enactment, one in eight (12%) small employers have either had their health insurance plans terminated or been told that their plan would not be available in the future (Q. 5).

There are some legitimate questions about this survey.  Many of the questions asked are of opinions and projections rather than already-known events.  The sample size is light as well, with only 750 businesses surveyed by NFIB.  That’s not an inadequate sample for a national survey, but it’s not exactly robust either.

Still, the core question involves events that have already transpired, which is either cancellations or notices of cancellations from insurers.  If 14 12% of the sample reported those outcomes, that means that 90 businesses have been either cut off or warned of cutoffs on their existing plans, with an impact averaging somewhere around 4500 employees.  That’s a significant result, especially given the “you can keep your health-care plan” rhetoric coming from the White House while urging passage of ObamaCare.

It also demonstrates one reason why businesses aren’t enthusiastic about expansion.  Under these circumstances, businesses can’t price the costs of their existing staffs, let alone additions to them through capital investment and expansion.  When risk can’t be quantified with some degree of certainty, then risk simply isn’t taken — and we get the stagnation we’ve seen for the last two years.

Update: The percentage should have been 12% (one in eight), not 14% (one in seven).  I’ve corrected the calculations as well; thanks to Ed R for the correction.

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“Despite his promise …”

I think I am beginning to see a pattern here…

/

Seven Percent Solution on July 26, 2011 at 7:22 PM

Has one man done this much damage, in such a short time to this country?
I hope he enjoys hell.

carbon_footprint on July 26, 2011 at 7:24 PM

What you didn’t know is when he said “if you like your Doctor…” he was only talking to the union members & other Democrat supporters who got one of the 1500 (& counting) waivers.

batterup on July 26, 2011 at 7:29 PM

Has one man done this much damage, in such a short time to this country?
I hope he enjoys hell.

carbon_footprint on July 26, 2011 at 7:24 PM

52%

joejm65 on July 26, 2011 at 7:29 PM

ObamaCare is going to cover MORE people at LESS cost.

Unfortunately the law does not begin with “Once upon a time….”

GarandFan on July 26, 2011 at 7:31 PM

He is President of the Looter-Americans. Producer-Americans not heard from again.

NaCly dog on July 26, 2011 at 7:33 PM

Friends who work for LARGE companies told me that their Benefits Departments told them that they might have to stop offering their health plans in 2014 when the full impact of Obamacare hits.

What are you hearing at your companies?

wren on July 26, 2011 at 7:35 PM

I work for one of these companies that had to drop healthcare because of Obama and his blasted meddling in the healthcare system! I haven’t had health insurance coverage since May and I’m a heart attack survivor! I haven’t been able to see my cardiologist because I can’t afford his charge for an office visit! Plus I am paying high prices for my own medications which I have to take. None of this would have happened if Obama, Pelosi and Reid had kept their filthy Democrat mitts off healthcare in this country or if the Republicans had had the brass cajones to stand up and stop them!

pilamaye on July 26, 2011 at 7:37 PM

ObamaCare is going to cover MORE people at LESS cost.

Unfortunately the law does not begin with “Once upon a time….”

GarandFan on July 26, 2011 at 7:31 PM

And it sure as hell doesn’t end with “…and they all lived happily ever after.”

trubble on July 26, 2011 at 7:38 PM

the system worked!

rob verdi on July 26, 2011 at 7:39 PM

Gotta pass the bill to find out what is in it per the old bat nan. bho just keeps on giving and giving and giving? bho how about your bd/vacation/get outta of dc/golf/fund raising on August 3? Gonna fly on AF1 to Chicago for it costing taxpayers millions?
L

letget on July 26, 2011 at 7:40 PM

Crush the private sector with regs and mandates and other Fed issues…..

…..leave the Gov to pick up the pieces and provide the “solution” (to make the industry a “utility”).

Pick an industry…..repeat.

At the end……fully transformed nation of dependent serfs for the First Lady and other Progressives to tell us how to properly wipe our arses, how much salt to put on our foods (if they don’t ban it altogether) and to “nudge” McDonalds into adding Apples in their Happy meals and remove Fries.

PappyD61 on July 26, 2011 at 7:41 PM

Where is, “your premiums will go down 3000%” in all of this?

betsyz on July 26, 2011 at 7:43 PM

Not only to small businesses but also to some Providers not renewing/offering individual coverage plans, as well…

Gohawgs on July 26, 2011 at 7:45 PM

Fourteen percent is closer to 1 in 7. I own a small business. If this happens to us, the first to complain, and demand that I and my partner do something about it, will be those who voted for Obama.

InterestedObserver on July 26, 2011 at 7:47 PM

Where is, “your premiums will go down 3000%” in all of this?

betsyz on July 26, 2011 at 7:43 PM

Well, if your insurance is cancelled you don’t pay any premiums.

Aviator on July 26, 2011 at 7:49 PM

We had our “Cadillac plan” gutted in the first phase of Obamacare. Now we still have “good” insurance, but that goes bye-bye next year when we have to renegotiate everything.

The race to LOWEST common denominator continues.

Jason Coleman on July 26, 2011 at 7:52 PM

Technical detail here….

It was not you can keep your healthcare, it was you can keep your doctor…. which makes it worse as your healthcare may decide to keep you but your doctor may choose to not deal with any government reimbursed plan.

I know a friend of mines doctor stopped seeing some of his existing patients.

AndrewsDad on July 26, 2011 at 7:52 PM

I get at least 100 solicitations per week for contributions to political candidates and/or conservative causes.

If their questionnaire (a favorite solicitation tactic) and/or their letter does not mention “Repeal of Obamacare” as a top priority, I return the literature to the sender with a note that we cannot support those who will not make repeal of Obamacare their top priority.

I have read this bill in its entirety, and I can tell you that I have yet to see an article which really even begins to spell out how destructive, expensive, and dysfunctional this bill really is.

landlines on July 26, 2011 at 8:09 PM

All part of the master plan. After private insurance is a thing of the past, everyone will be on Ocare. It’s what they want.

chewmeister on July 26, 2011 at 8:14 PM

At the end……fully transformed nation of dependent serfs for the First Lady and other Progressives OPPRESSIVES to tell us how to properly wipe our arses, how much salt to put on our foods (if they don’t ban it altogether) and to “nudge” McDonalds into adding Apples in their Happy meals and remove Fries.

PappyD61 on July 26, 2011 at 7:41 PM

FIFY

Chip on July 26, 2011 at 8:15 PM

Where is, “your premiums will go down 3000%” in all of this?

betsyz on July 26, 2011 at 7:43 PM

Barry misspoke. He meant to say your premiums will go UP 3000%.

AZCoyote on July 26, 2011 at 8:16 PM

ObamaCare is going to cover MORE people at LESS cost.

Unfortunately the law does not begin with “Once upon a time….”

GarandFan on July 26, 2011 at 7:31 PM

Then why does Obamacare need $2 Trillion MORE MONEY than any previous plan PLUS an additional $0.5 Trillion stolen from Medicare???? These facts suggest that the story you bought into is nothing but fairy dust and unicorn farts.

Doctors are “opting out” of all government insurance programs first, and all insurance programs second at a RECORD RATE. The new model which is emerging is an “access by subscription” model whereby doctors file no insurance claims and patients are directly responsible for all medical payments.

In other words, the entire medical safety net has not only unraveled, it is on fire!!!

Short of trying to enslave doctors, how is big government going to attempt to fix this????

IT CAN’T!!! OBAMACARE IS ALREADY AN UNMITIGATED DISASTER WHICH DENIES CARE TO THE VERY FOLKS IT WAS INTENDED TO “HELP”!!! It has fired doctors and hired IRS agents in their place: good luck getting that cancer treatment at an IRS office!!!

landlines on July 26, 2011 at 8:28 PM

One in eight small businesses get insurance cancellations after ObamaCare passage

14 percent, or one in eight

Would you believe ONE IN SEVEN????

1 in 8 = 12.5%

1 in 7 = 14.28%

fred5678 on July 26, 2011 at 8:32 PM

What you didn’t know is when he said “if you like your Doctor…” he was only talking to the union members & other Democrat supporters who got one of the 1500 (& counting) waivers.

batterup on July 26, 2011 at 7:29 PM

My favorite Obamacare photoshop of all time: Keep Your Doctor

slickwillie2001 on July 26, 2011 at 8:45 PM

pilamaye on July 26, 2011 at 7:37 PM

You don’t matter. Obama needed to cover the illegal immigrants and the pork-rind eaters who are too stupid or too lazy to enroll in Medicaid.

This is what we get for creating policy based only on anecdotal stories. Don’t forget Louise Slaughter needed to get a constiuent’s dentures covered.

BuckeyeSam on July 26, 2011 at 8:49 PM

Where is, “your premiums will go down 3000%” in all of this?

betsyz on July 26, 2011 at 7:43 PM

Awesome when you realize that reducing premiums by 100% makes it free. At 3000%, that’s gotta be a better deal than the earned income tax (refundable) credit.

BuckeyeSam on July 26, 2011 at 8:53 PM

Where did Hot Air get the Daily Caller “14%” quote???

When click on the link, it says:

have been or will be eliminated since PPACA’s passage — 12 percent, or one in eight.

fred5678 on July 26, 2011 at 8:55 PM

We have to pass it to find out what’s in it.

And Nancy Pelosi said that with a straight face.

Oh, wait. She says everything with a straight face.

Wander on July 26, 2011 at 9:18 PM

Has one man done this much damage, in such a short time to this country?
I hope he enjoys hell.

carbon_footprint on July 26, 2011 at 7:24 PM

I’m sorry but it hasn’t been just one man. The entire Democrat party is equally responsible (or irresponsible I guess). Certainly he has focus but this crap is what the Democrats have been pushing, in earnest, for 40 years.

whbates on July 26, 2011 at 9:35 PM

Can’t they get waivers?

/////////////////////////////////

Khun Joe on July 26, 2011 at 9:37 PM

We have to pass the bill to find out what’s in it. The same thing apparently is true with any budget bill out of the House.

flytier on July 26, 2011 at 9:39 PM

I’m surprised it is not worse.

Slowburn on July 26, 2011 at 10:21 PM

Where is, “your premiums will go down 3000%” in all of this?

betsyz on July 26, 2011 at 7:43 PM

.
“Did I say ‘premiums’? I meant ‘coverage’.”-bho

mrt721 on July 26, 2011 at 11:07 PM

I still don’t know what to think about this until I have crr6 show up and explain for us why this is “good for us” again.

Del Dolemonte on July 26, 2011 at 11:08 PM

thank you President Obama

crr on everyday no matter what

/

Talk about a lapdog

CW on July 26, 2011 at 11:32 PM

These small businesses are just waiting for Obama to raise their taxes, then they’ll start offering health insurance again.

bayam

xblade on July 26, 2011 at 11:36 PM

This wouldn’t be a failure of Obamacare. This would be a success for Obamacare. The intent of that program is to sabotage the private insurance market, driving prices through the roof, leaving employers and insurers alike open to a tsunami of class-action suits, and forcing millions of formerly-covered Americans into the ranks of the uninsured–all at spectacular cost to the American people. This way, leftists in the future can crow to the cameras “See? We gave the ‘free market’ a chance and it failed! We’ve no choice but to socialize!” As Jan Schakowsky put it, “This is not a principled fight.”

Blacklake on July 27, 2011 at 1:28 AM

I happen to work for one of those health insurance companies and I can tell you this is just the tip of the iceberg. Every 3 months or so we are getting a new set rules and regulations from one of the various agencies, oversight panels or review committees created under this bill. I can’t remember when was the last time I had a full weekend off. Coupled with the layoffs we continue and the work load has become crushing and the only thing that help keeps your sanity is realizing that at least you aren’t one of the lawyers pouring through all these news regs and regulations. The alcoholism and suicide rate among them must be high. Each new set comes with often contradictory rules, layers and layers of new documentation all leading to what is going to be one hell of a bureaucratic nightmare.

It has gotten so bad that our company has now expanded into China in an effort to salvage something. Yeah, you read that right. The business climate in China is better then it is here and that shining beacon of communism is changing their existing state run health insurance over to a private/public system while we are going the exact opposite way.

A lot of people say I should be lucky to have some resemblance of job security but what good is job security if you are working yourself to death. Being on the inside and looking out, the forecast is by 2015 we will be just a shell of what we were today, which is getting meager. BTW we are on the Forbes Top 50 but soon we will referred to in conversations only as an item of nostalgia. The government is looking to take over one of the big guys to handle the administrative portion of their take over since it requires a huge IT and claims processing capability and right now the insider baseball stuff is between the big 3 insurers to prove that they can handle the workload since they realize that as a private business they will cease to exist. One of the large companies has already teamed up with AARP hoping to give them the inside track and as such they have been granted exemption from the prohibition to write Medicare Advantage policies, which the AARP now refer to as Medigap and you may have seen commercials from them promoting such plans since they are the only ones going to be allowed to do so. The company is in the micetype disclaimers in the commercials that AARP runs. More of the same where this administration is picking the winners and losers.

Okay rant off but let me conclude by saying you are so screwed as far as health care is concerned, you just don’t know it yet cause you are under the influence of a date rape drug but when you wake up no amount of coffee and aspirin is going to take the pain away.

Just A Grunt on July 27, 2011 at 7:58 AM

Has one man done this much damage, in such a short time to this country?
I hope he enjoys hell.

carbon_footprint on July 26, 2011 at 7:24 PM
52%

joejm65 on July 26, 2011 at 7:29 PM

Heh.

Okay rant off but let me conclude by saying you are so screwed as far as health care is concerned, you just don’t know it yet cause you are under the influence of a date rape drug but when you wake up no amount of coffee and aspirin is going to take the pain away.

Just A Grunt on July 27, 2011 at 7:58 AM

Thanks for the info.During our constract negotiations this spring, the Blue Cross/Blue Shield lady came in to discuss options with our ‘Cadillac Plan’.
2014 is the ticking time bomb from what I understand.
It seems as if the sheet hits the fan right then & there big time.
I weep for my country.
And I am angered by the fools that came before & who continue onward today to rape & pillage this Republic.

Badger40 on July 27, 2011 at 8:23 AM

I am one of the small business owners who had to cancel health insurance benefits for all employees.

Thank you, President Obama.

stvnscott on July 27, 2011 at 8:38 AM

because of romneycare, companies in my state are starting to offer group pet insurance plans as a perk- because they gave up on being able to pay for group human health insurance because the costs are destroying them.

so romneycare works- driving down the cost and driving up the availability of pet insurance. the man with the plan for certain- let’s make willard president and the pets of the land will be healthier.

mittens on July 27, 2011 at 8:52 AM

All part of the master plan. After private insurance is a thing of the past, everyone will be on Ocare. It’s what they want. chewmeister on July 26, 2011 at 8:14 PM

And if you test for nicotine (even from an occasional cigar) you pay more.

And if you can’t provide proof of membership and attendance at an approved gym, you pay more.

And if you keep a gun in the house, you pay more.

Et cetera.

Akzed on July 27, 2011 at 9:08 AM

What in the world is the U.S. Department of Health and Human Services, Office of the Assistant Secretary for Health, Office of the Surgeon General, Office of the Civilian Volunteer Medical Reserve Corps?

FAIRFAX, Va., Jul 22, 2011 (BUSINESS WIRE — ICF International (NASDAQ:ICFI), a leading provider of consulting services and technology solutions to government and commercial clients, has been awarded a re-compete contract from the U.S. Department of Health and Human Services (HHS), Office of the Assistant Secretary for Health, Office of the Surgeon General, Office of the Civilian Volunteer Medical Reserve Corps (OCVMRC). The contract has a value of $16.3 million and a term of one base year and four option years.

ICF will provide the OCVMRC with technical expertise and administrative support for communications, outreach, deployment operations, regional coordination, and information technology. Additionally, ICF will provide support for geographical information, website portal, and content management systems for the nationwide network of Medical Reserve Corps units and volunteers. The effort aligns closely with HHS priorities, including support for local prevention activities as well as the effort to improve preparedness and response capabilities by supplementing and complementing local, state, and federal health and medical response capabilities.

“We are proud to continue our efforts supporting HHS and the OCVMRC in its mission to engage volunteers to strengthen public health, emergency response, and community resiliency,” said Mary Whitley, senior vice president for ICF International. “Each member of our experienced ICF team of professionals is grounded in strong technical expertise, rigorous methodology, and a profound commitment to addressing client challenges.”

“This contract is another example of ICF’s ability to leverage our IT and health domain knowledge in public health issues,” said Ellen Glover, executive vice president for ICF International. “We are honored to assist the HHS, Office of the Surgeon General in supporting this important initiative.”

Akzed on July 27, 2011 at 9:12 AM

So why are those doctors in the lead story photo applauding? Oh wait. I remember. The White House issued doctor costumes to a bunch of “extras” to help fill up the seats.

So how are those reduced Medicare payments working for you now, huh doc?

kens on July 27, 2011 at 10:26 AM