NSBA President Testifies on Affordable Care Act

March 12, 2014

pic-todd-testifyOn March 6, 2014, NSBA President and CEO Todd McCracken testified before the House Small Business Subcommittee on Contracting and Workforce on the impact of Obamacare on small-business owners and the self-employed. The hearing, titled, “ObamaCare and the Self-Employed: What about us?” featured a number of self-employed business owners and experts on small-business health care.

Led by Rep. Richard Hannah (R-N.Y.), Chairman of the Subcommittee, Mr. Hannah opened the hearing citing increasing costs of healthcare, stating: “Many self-employed businesses have experienced higher health insurance costs, shrinking provider networks, and coverage confusion since Obamacare was signed into law.”

In his testimony, McCracken summarized a recent survey, the NSBA 2014 Small Business Health Care Survey which shows how America’s small businesses are dealing with rising health care costs, what kind of benefits they offer and how the Patient Protection and Affordable Care Act (PPACA) is impacting their businesses.

McCracken underscored the chairman’s comments that health costs are rising for the smallest companies and stated that: “The survey confirmed what has been widely reported about health care costs for our smallest companies: they are rising steeply, and entrepreneurs are deeply concerned about what the future might hold. Unfortunately, these rising costs are not new. Small firms have been facing, oftentimes, double-digit increases in the cost of their health care over the past two decades. Unfortunately, PPACA has done little to stem these increases, and could actually make it worse for many small firms.”

He went on to outline the three most impactful reforms of PPACA as they pertain to the self-employed, including: tighter rating rules, particularly when it comes to rating based on age; guaranteed issue which requires insurers to accept all applicants regardless of health status; and defined minimum benefit requirement. All of which will effectively create winners and losers, and, depending on how the individual mandate is adhered to, could make for increased costs for many of those most in need of health insurance.

In closing, McCracken outlined what NSBA believes could provide some relief for the self-employed, stating that, “While we would like to see a “do-over” of this law, we think there are some key changes that could improve the law for the self-employed in the near-term.”

Specifically, McCracken urged Congress to adjust rating bands from the current 3:1 allowable age rating ratio to perhaps 5:1, because the narrower the rating bands, the higher the average premium will be with the biggest increases hitting younger (and likely healthier) workers which will create a disincentive for those individuals to purchase insurance. He also urged Congress to close the unfair loophole which currently prohibits only the self-employed from paying for their health insurance premiums pre-tax, subjecting them to an added tax burden of 15.3 percent on the cost of their premiums—something no other worker or business owner faces.

Please click here to read McCracken’s full testimony.

Please click here for additional details on the hearing.