Report: Two-thirds of small business employees to see Obamacare premium hikes
Obamacare is once again under fire after federal estimates that health insurance premiums will increase for 11 million people who work for small businesses, according to a report from the Centers for Medicare and Medicaid Services (CMS).
House Speaker John Boehner blasted the Obama administration over the report Monday, calling it yet another “broken promise” from Obamacare’s authors.
“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,” Boehner said in a statement. “This is another punch in the gut for Americans already struggling in the president’s economy.”
Boehner played a key role in commissioning the report, which was mandated by the 2011 Budget Control Act, or the sequester.
Missouri Republican Rep. Sam Graves, chairman of the House Small Business Committee, hit back against the Obama administration delaying the damning report — which was supposed to be completed within 90 days of the enactment of the sequester.
“The Obama administration’s long delay of this CMS report is consistent with the rest of the law — behind schedule and bad news for small business,” Graves said.
CMS initially issued the report to Congress Friday afternoon, rating Obamacare’s effect on premiums in the small group market, or for those individuals with employer-based coverage from a small business. The results were buried by news about Obamacare’s impact on Medicare Advantage.
Obamacare’s changes to the Public Health Service Act will result in premium hikes for 11 million Americans, but will trigger reductions for only 6 million individuals, CMS estimated in the report. Small employers’ costs will rise with the premium hikes as well.
Among the Affordable Care Act’s many changes to currently-held health insurance plans, several sections created even more restrictions on how premium rates may vary. Insurers may take just four factors into account when determining premium rates in the small group and individual market: individual vs. family enrollment, geographic area, age and tobacco use.
Premium rates used to vary depending on a variety of factors, such as prior claims history, health status and gender — women use significantly more health services than men and have typically been charged higher premiums to account for the higher cost to cover their care — but Obamacare outlawed this as discrimination.
While the agency overseeing Obamacare didn’t make any final predictions, it warned of “considerable uncertainty as to whether small employers will decide to terminate their existing offer of health insurance coverage and send their employees to individual market Exchanges.”
CMS notes that some small business employees will benefit financially by getting taxpayer-subsidized insurance on the exchanges instead of purchasing their own through their employer. But the threat of more companies cutting coverage could cause more negative pushback for the health care reform law.
The small businesses which CMS fears may begin cutting coverage altogether aren’t subject to the employer mandate requirement. After the latest Obamacare delay, even medium-sized businesses between 50 and 99 employees will have until 2016 to comply with the requirement to provide employees coverage, opening the possibility of more companies laying off employees so they can cut out increasingly expensive insurance coverage altogether.
Democrats have brushed CMS’ findings aside.
House Minority Leader Nancy Pelosi’s spokesman Drew Hammill called the Obama CMS-issued report “the latest instance of House Republicans attempting to peddle half-truths and incomplete data” to fight the Affordable Care Act.
“The report only considers the impact of three provisions in isolation, and, for example, does not consider that many small businesses will quality for tax credits and hundreds of thousands of small businesses have already claimed credits of $1 billion,” Hammill said in a statement.
The tax credits Pelosi references are currently only available offline to small businesses, who must go through a broker until 2015. The Obama administration has yet to even launch its advertised SHOP exchange for small businesses, which was delayed after technical problems arose in the midst of HealthCare.gov’s meltdown and won’t launch until November.
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