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.