CMS: Two-thirds of small businesses to pay higher premiums under ObamaCare

posted at 10:01 am on February 25, 2014 by Ed Morrissey

If you like your plan … er, your doctor … I mean, your premiums … it’s all the same now. A new report from the Centers for Medicare and Medicaid Services (CMS) shows that ObamaCare will force small businesses to pay higher premiums for health insurance, despite years of promises that the law will reduce health-care costs:

Nearly two-thirds of small businesses that currently offer health insurance to their workers will pay more for coverage as a result of new rules in the health care law, as will millions of small-business employees and their family members, according to new estimates released by the Obama administration.

The Centers for Medicare and Medicaid Services, which has spearheaded the implementation of the law, has acknowledged that new rules requiring insurers to offer guaranteed coverage and renewal options to small employers will likely drive up the price of insurance for some companies. So will rules banning insurance companies from varying their rates based on factors like a company’s industry or the age of its employees. …

What we didn’t know was how many small businesses would see their rates rise and how many would see them fall. Now, it’s becoming clear.

“We are estimating that 65 percent of the small firms are expected to experience increases in their premium rates while the remaining 35 percent are anticipated to have rate reductions,” CMS’ Office of the Actuary wrote in a new report. Conversely, “the effect on large employers is expected to be negligible,” because most large companies run their health insurance programs in house.

The Washington Post’s J. D. Harrison reports that CMS officials expect these businesses to pass these costs onto their employees, which means that they will end up earning less in wages. Alternately, these businesses can simply dump their employees out of their health insurance, especially if they fall under the 50-employee floor of the mandate and don’t have to pay a penalty. That means millions of people may find themselves in the already-horrid individual market, many without subsidies, which will eat even further into their incomes.

But ObamaCare has at least limited the cost increases in these premiums up to now, right? Wrong. The National Small Business Administration reports that the average premium cost has risen from $590 in 2009, the year before ObamaCare’s passage, to more than $1100 in 2014. That’s more than double the premium costs, before the application of the mandate. So much for bending the cost curve downward.

John Boehner blasted the Obama administration over the report, which by the way was two years late:

“The Obama administration has finally been forced to disclose what we’ve long feared: the president’s health care law means higher premiums for millions of American workers. For all the promises of lower costs for small businesses, the administration now admits that far more of these workers will pay higher than lower premiums under the law. This broken promise comes in the form of lower take-home pay for some of the hardest-working people in this country.  Two-thirds of these Americans – 11 million people – will see more money coming out of their paycheck every month, according to the president’s own actuaries. This is another punch in the gut for Americans already struggling in the president’s economy.  Two-thirds of small business employers face higher premiums as well, which is one of the reasons so many are struggling to create jobs under the president’s law.

“It’s clear why the Administration sought to delay and deemphasize the release of this report. It undermines the central promise of the president’s health care law: affordable coverage. And the only reason this information has come to light is the hard oversight work of House Republicans. These 11 million people who will see their premiums spike are 11 million more reasons to repeal this law and start over with common sense reform that will make care more affordable, not more costly.”

Is there an ObamaCare promise that has turned out to be true?

Update: By the way, the costs of the program itself continues to rise, too.

Update: Actually, Investors Business Daily had this ahead of the Washington Post. The analysis at IBD is much more pointed, too:

As recently as last summer, Pelosi was proclaiming that “if you’re a small business … it lowers costs,” while Waxman said the law would make “high-quality healthy insurance more affordable and more widely available for small businesses.”

Notice that nowhere — either before or after ObamaCare passed — did any Democrat say anything about two-thirds of small businesses paying more for health coverage so the lucky one-third could get rate cuts.

These same Democrats also say that the CMS report suffers a “large degree of uncertainty” (which is true of any study about ObamaCare) and is “incomplete” because it didn’t factor in ObamaCare’s small-business tax credit.

Trouble is, this tax credit has been a complete failure.

It’s so overly complex and so narrowly focused — companies must have fewer than 25 full-time workers, pay them less than $50,000 on average, cover half of premium costs, etc. — that just 170,000 claimed it in 2010, despite administration forecasts that 4 million would.

Be sure to read it all.


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And no on can apparently do anything about it.

albill on February 25, 2014 at 10:05 AM

For higher deductibles, higher co-pays, and smaller networks of doctors.

Win-Win-WIN.

jukin3 on February 25, 2014 at 10:06 AM

Majority of employee health insurance meetings this year: Good morning. Here’s the web address to HealthCare.gov. Now get back to work.

NotCoach on February 25, 2014 at 10:07 AM

Is there an ObamaCare promise that has turned out to be true?

Joe Wilson answered that question years ago.

fogw on February 25, 2014 at 10:09 AM

Is there an ObamaCare promise that has turned out to be true?

The death panels are right on track.

Happy Nomad on February 25, 2014 at 10:09 AM

Wonder what that number would have been if we had a workforce as large as the one in 2007… And 17 million seems like a smallish figure representing the total number of small business employees affected by Obamacare. Of course, maybe that’s due to Obamanomics too.

BKeyser on February 25, 2014 at 10:11 AM

The philosophy of that old song is getting more and more appealing every day.

“Sitting on the dock of the bay, wastin’ time” ♫ ♫ ♫

Why fukcing bother anymore?

NapaConservative on February 25, 2014 at 10:11 AM

A national tax revolt is needed – both businesses and individuals.

Shy Guy on February 25, 2014 at 10:11 AM

Silly small businesses. If you want to get a waiver from Obama you have to be a BIG business.

PackerBronco on February 25, 2014 at 10:12 AM

Oh dear, wait until obama reads about this. He is going to be so very, very angry.

HumpBot Salvation on February 25, 2014 at 10:14 AM

John Boehner blasted the Obama administration over the report

Blasted? Alert the media, terse memo to follow!

Neither Boehner or any of the rest of the “Republican leadership” are “blasting” anybody except Ted Cruz. The supposed strategy for the rest of 2014 is for Republicans to HAMMER the Democrats with Obamacare. I’m still waiting to hear the sounds of the first hammer strike.

While the Republicans plan silently in back alleys, Obama and the Democrats are pounding away on climate change, immigration, minimum wage, and gay everything.

pilsener on February 25, 2014 at 10:18 AM

yep… pay more for chity’r products…. the gubRmint way.

A simple 3rd grade understanding of monopolies.

roflmmfao

donabernathy on February 25, 2014 at 10:25 AM

These lies are the primary feature of the Dem Party in general and O’, in particular. Howsomever, The One did tell one glaring truth early on, ” I love America, therefor, I will change it”…

vnvet on February 25, 2014 at 10:27 AM

CMS: Two-thirds of small businesses to pay higher premiums under ObamaCare

Clearly, the headline is racist. I was promised premiums would be cut by 3000%!

There Goes the Neighborhood on February 25, 2014 at 10:31 AM

I have a friend who has a small business and she told her 4 employees to go to the website, all make at least 30 thou a year and all are on some type of “subsidized” plan now. It’s ridiculous. They all used to be on United Healthcare and she withdrew from their check, now all employees are “insured” courtesy mainly you and me. I just told her lets see how long it lasts.

Marcus on February 25, 2014 at 10:32 AM

Only two thirds?

Fenris on February 25, 2014 at 10:32 AM

Only two thirds?

Fenris on February 25, 2014 at 10:32 AM

The other third will go out of business.

Tater Salad on February 25, 2014 at 10:45 AM

One
Big-
Ass
Mistake,
America

SacredFire on February 25, 2014 at 10:47 AM

Even the name of this EpicClusterFark is a lie….

Patient Protection and Affordable Care Act

Patients aren’t protected. 6 Million so far have lost their individual insurance after being promised ‘if you like your insurance, you can keep your insurance’. Networks have shrunk, so many can’t keep their doctors. In CA, reductions in reimbursements have driven many doctors out of accepting ACA patients.

Affordable? The only people who are finding this ‘affordable’ are those fortunate one’s who were able take advantage of the expansion of Medicare’s coverages to get taxpayer funded health insurance. Everyone else, despite government subsidies (also taxpayer funded), is paying more for their premiums in addition to higher annual out-of-pocket costs. I’m still waiting for the 4 pinocchio’s to appear for the promise that the average family will save $2,500 annually.

This clusterfark was never about ‘fixing’ the challenges in healthcare. It’s all about expanding government power to seize control of 1/6th of the national economy, suck greater amounts of money out of the economy, and have the government use those funds to expand wealth redistribution in the name of social justice and fairness.

Athos on February 25, 2014 at 10:49 AM

…how are the Pinocchio awards coming?

KOOLAID2 on February 25, 2014 at 10:52 AM

Is there an ObamaCare promise that has turned out to be true?

Is there anything that Obama has said or policy implemented that has come true or worked for the people?

plutorocks on February 25, 2014 at 10:52 AM

Two-thirds of small businesses to pay higher premiums under ObamaCare

Clearly, the headline is racist. I was promised premiums would be cut by 3000%!

Yes … a savings of $2,500!! I wonder where it is?

majorzot on February 25, 2014 at 10:53 AM

No matter the harm, ObamaCare supporters will defend this law until the bitter end. After all, their egos are at stake.

pwrefugee on February 25, 2014 at 11:02 AM

A national tax revolt is needed – both businesses and individuals.
Shy Guy on February 25, 2014 at 10:11 AM

FIFY

Cleombrotus on February 25, 2014 at 11:06 AM

This festering turd of a law is so ineptly conceived and written, you’d begin to suspect that the Death Panels will actually fail to kill anybody.

But, you’d certainly be wrong, wouldn’t you?

trigon on February 25, 2014 at 11:15 AM

Can we once and for all admit that Mr. Obama’s legacy now will be as the most proficient and prolific liar ever to hold the office of the Presidency? And the most inept at hiding it…although I will credit him for stonewalling it long enough to get elected to a second term.

All politicians lie, but most include at least a smidgen of truth and use words carefully enough to allow them some wiggle room, preventing the opposition to prove an intent to lie. Of course, they have never issued a brazen lie punctuated by the work, “period.” And there goes the wiggle room.

Any adult with an earned (as opposed to one that was gifted for the school’s statistical purposes…but I digress)High School Degree is aware that there is no such thing as “free” anything…not a free lunch and certainly not free health insurance. At least not for long…it is a delayed bill that comes due eventually. I wonder if we all have become so narcissistic that we can so easily, with knowledge of the truth, pile the costs of the current spending levels on our grandchildren…and smile while doing it? Apparently so.

TKPedersen42 on February 25, 2014 at 11:15 AM

I know you guys know this, but lots of my Liberal partners in crime do not, thus I will state the obvious. Compensation to employees is the sum of direct wages, taxes (FICA State and Federal Unemployment Insurance), Worker Compensation and fringe benefits (Health Care, Vacation Days, PTO, 401 (k) matching, in-house day/child care, parking, monthly gas allowance….and on and on and on). I currently provide the above bennies plus others.

Increase compensation means money must come out of my clients pockets, or money has to come directly out of my pocket since I am the owner, or out of the employees pocket directly, or I incur savings though efficiency (which is another word for reduced hours).

Those are my choices, well I could just close shop and retire, but that would be drastic; thus I ask……which one will I do if I can manage the on-coming moral problem.

I see a lot my Liberal cohorts trolling and how about an honest liberal to liberal conversation on a public conservative website about the increase cost to me because of The ACA. Not wanting to debate The ACA, I want to discuss real life issues that affect our lives.

HonestLib on February 25, 2014 at 11:28 AM

Is there anything that Obama has said or policy implemented that has come true or worked for the people?

plutorocks on February 25, 2014 at 10:52 AM

fundamentally change america
problem is too few believed a senator with a vote present record meant it.

dmacleo on February 25, 2014 at 11:30 AM

I see a lot my Liberal cohorts trolling and how about an honest liberal to liberal conversation on a public conservative website about the increase cost to me because of The ACA. Not wanting to debate The ACA, I want to discuss real life issues that affect our lives.

HonestLib on February 25, 2014 at 11:28 AM

not sure there is any one “right” answer.
but, keep this in mind, YOU built that business and if you go under they go under.
you must, and in some cases by law, strive to make a profit. w/o a profit you cannot provide them with their jobs.
protect the head…

dmacleo on February 25, 2014 at 11:33 AM

YOU built that business

dmacleo on February 25, 2014 at 11:33 AM

But…but…but…that would make HonestLib a RAAAAACISSSST!!!

*GASP*

NapaConservative on February 25, 2014 at 11:42 AM

And no on can apparently do anything about it.

albill on February 25, 2014 at 10:05 AM

It isn’t that they can’t, they won’t. Big Gov and Big Biz work to eradicate small business. Small business owners tend to be more politically independent in nature not bowing to the desires of a particular political party that enjoys overtaxing, overregulating and dreams of ushering in a communist utopia while Big Biz looks at every small business siphoning off business as a growing potential threat to its own interests and profit.

hawkeye54 on February 25, 2014 at 11:53 AM

<blockquote

…Those are my choices, well I could just close shop and retire, but that would be drastic; thus I ask……which one will I do if I can manage the on-coming moral problem…

HonestLib on February 25, 2014 at 11:28 AM

As you say, it’s stating the obvious: you’ll probably be able to squeeze your employees one way or another to stay in business. I doubt you’ll be raising prices much. But everybody’s situation is different, I hope you’re around long enough to tell us what you manage to work out.

The company I’m with switched from United Health to Blue Cross. It was a downgrade, but I’m better off than some, being healthy and having something that doesn’t break the bank. The only other real benefit is 401k match. The other thing they do is hire less experience (i.e. cheaper) people and try to make up for it by working them harder. Doesn’t really work out usually, but that’s the theory.

Fenris on February 25, 2014 at 11:53 AM

A national tax revolt is needed – both businesses and individuals.
Shy Guy on February 25, 2014 at 10:11 AM

FIFY

Cleombrotus on February 25, 2014 at 11:06 AM

The Left keeps pushing as hard as it is and that revolt becomes likelier day by day.

hawkeye54 on February 25, 2014 at 11:55 AM

Is there an ObamaCare promise that has turned out to be true?

YesWeKen on February 25, 2014 at 11:59 AM

Many of us are highly educated, and most of us aren’t even drunk, so an easy free rider explanation should be a piece of cake.
 
rogerb on February 21, 2014 at 5:36 PM

 
Hey, I’ll bet you’re up in the years so that this particular problem, very soon, will not even concern you anymore.
 
Dave Turson on February 21, 2014 at 5:50 PM

rogerb on February 25, 2014 at 12:19 PM

And he continues to pay lip service to “strengthening the middle class”, yet his policies – O-care and the minimum wage – work in reverse of this objective. Oh, and let’s not forget that utility rates will have to increase if we’re going to save the planet from “Climate Change”. Another one to “strengthen the middle class”. This is a bad dream, right? I’m still waiting for someone to pinch me!

mel23059 on February 25, 2014 at 12:20 PM

Those are my choices, well I could just close shop and retire, but that would be drastic; thus I ask……which one will I do if I can manage the on-coming moral problem.

I see a lot my Liberal cohorts trolling and how about an honest liberal to liberal conversation on a public conservative website about the increase cost to me because of The ACA. Not wanting to debate The ACA, I want to discuss real life issues that affect our lives.

HonestLib on February 25, 2014 at 11:28 AM

Your most basic choice is binary. You can continue to go on (if you can), or not.

If you stop, it’s game over and you don’t have to worry.

If you choose to continue, and you successfully can do so, you’ll have to make painful choices. It always helped me to prioritize.

My customers came first. Without them, I had no business. My business was quite literally about keeping them happy and providing them with the things that they wanted. I did require a couple of things from them. They had to give me money. They also couldn’t give me more grief than they were worth. If they failed either test, I fired them. I didn’t do this lightly, or often.

My vendors and my bank came second. Both provided me with credit to stay in business and the merchandise and services I needed to serve my customers. While I had long and fruitful relationships with a great many vendors, I’d change vendors in a heartbeat for a better price, merchandise, or service. I was their customer and I decided I would behave just as my customers would behave with me.

Next, came my employees. It was my job to pay them, train them, and, look after their welfare when I could and it was appropriate. They were there to help me. If they couldn’t manage that, I had to help them move along.

Lastly, I worried about myself.

This is a lot of stuff to keep juggling. If you don’t make money, it all falls apart. You’re vendors stop serving you and your employees don’t get paid.

I was always looking for efficiency. That meant cutting costs when I could. It also meant looking for new products that were profitable. Raising prices to my customers was something that I always considered to be one of my last options. In hindsight, I did so many other things so well that I probably could have gotten away with raising prices more than I actually did.

This was a number of years ago, but, even then, health care was a problem. I did provide it, even for part-time employees, when the plan parameters allowed for it. To keep costs down, I changed plans and coverage several times.

Ultimately, I quit my business. I had several good reasons to do so. Generally, I don’t regret it. But, I do miss it sometimes. The employees I had at the time all got on with their lives when I shut down, just like all the others that had moved on before them. It wasn’t the end of the world. I still hear from some of them now and then. At least two of them have their own businesses in the same industry now.

I enjoy my life a lot more now. I don’t usually have to work ungodly hours and worry all the time about keeping all those balls up in the air and smiling while I do it. So, if you decide to quit, there is life afterward.

trigon on February 25, 2014 at 12:40 PM

As is the SOP for democrats and Obama in particular, whatever they say they will do the opposite. The middle class should be quite worried about this as the democrats and Obama are promising to help them out.

Note to the middle class, the grand socialist revolution and utopian society that the democrats and Obama dream of cannot happen until you the middle class are wiped out. Anything the democrat party or Obama says is a lie.

jukin3 on February 25, 2014 at 1:00 PM

I see a lot my Liberal cohorts trolling and how about an honest liberal to liberal conversation on a public conservative website about the increase cost to me because of The ACA. Not wanting to debate The ACA, I want to discuss real life issues that affect our lives.

HonestLib on February 25, 2014 at 11:28 AM

I hope you’re not holding your breath waiting for one of the troglodytes to pick up the gauntlet.

Thomas More on February 25, 2014 at 2:12 PM

Is there an ObamaCare promise that has turned out to be true?

The death panels are right on track.

Happy Nomad on February 25, 2014 at 10:09 AM

Ouch.

AesopFan on February 25, 2014 at 4:30 PM

I see a lot my Liberal cohorts trolling and how about an honest liberal to liberal conversation on a public conservative website about the increase cost to me because of The ACA. Not wanting to debate The ACA, I want to discuss real life issues that affect our lives.

HonestLib on February 25, 2014 at 11:28 AM

I hope you’re not holding your breath waiting for one of the troglodytes to pick up the gauntlet.

Thomas More on February 25, 2014 at 2:12 PM

On the other hand, the not-so-troglodycious are welcome to state their case.

(On the third hand, there are some “conservative” trolls at HA also, and their comments are just as much wasted space as the Lefties’ are.)

((Fourth-handedly, even the non-trolls sometimes have an off day.))

(((And fifthly, I learn a tremendous amount from some of our commenters, regular and sporadic, based on real-life experience and contemplation of the issues. Thanks to all y’all.)))

AesopFan on February 25, 2014 at 4:35 PM

I see a lot my Liberal cohorts trolling and how about an honest liberal to liberal conversation on a public conservative website about the increase cost to me because of The ACA. Not wanting to debate The ACA, I want to discuss real life issues that affect our lives.

HonestLib on February 25, 2014 at 11:28 AM

That’s not going to happen on this blog.

Vince on February 25, 2014 at 4:41 PM

Is there an ObamaCare promise that has turned out to be true?

Damn good question that should be asked of Sebelius and the REB every day.

slickwillie2001 on February 25, 2014 at 4:54 PM

That’s not going to happen on this blog.

Vince on February 25, 2014 at 4:41 PM

Well, I know my Liberal friends are out there lurking. I know what my Liberal cohorts discuss with me behind closed doors. Shame on you guys for not having the courage to discuss real world issues in a conservative public forum. Guess I was dumb enough to try. My bad. How are we to learn if we will not listen to others and have open and honest discussions of the issues? I guess the next thing is to have my Liberal card pulled for not being the “Good Liberal”. I left the echo chambers (HuffPost, Daily Kos, Mother Jones) in 2009 and ain’t looked back. Best you guys go back with the small minds. I am truly disappointed as I know you guys are lurking. Grow a pair and come out and play as this is an easy subject.

On the other hand, the conservatives here are putting up with me and playing hard at times, but fair, and I am learning a lot….as life should be.

Send a long letter get back a post card…times are hard…HT to JT.

HonestLib on February 25, 2014 at 6:12 PM

John Boehner can kiss my big white arsini.

sheesh on February 25, 2014 at 10:18 PM