No Hope for the Little Guys

Unlike the triumphant ending in the age-old tale of David and Goliath, little hope exists for small businesses to successfully battle the giant burden of healthcare provision under the ACA. Several small businesses already face the daunting challenge of skyrocketing costs of health insurance premiums. For example, small businesses pay approximately eighteen percent more than large firms for the same health insurance policy.  This leaves several employers unable to provide coverage for their employees. Recognizing this, the new healthcare bill attempts to design reforms that will attenuate the burden of absurd premium costs. However, the new bill will actually serve to obstruct opportunities for job growth and success: implementation of the ACA is expected to impose fifty-two billion dollars on businesses by mandating employers to provide health insurance.  While larger corporations may have the means to comply with this, small businesses will suffer significantly.

The lengthy new healthcare bill leaves most feeling overwhelmed and unwilling to read and fully understand the new provisions. Owners of small businesses likely harbor similar sentiments. Without this understanding, they are unable to realize the negative impacts that will ensue from such “benefits. ”  For example, within the excessive fine print of the ACA, small business owners will find the harsh reality underlying the attractiveness of tax credits.  In 2010, the ACA attempted to mask its burdensome costs on small businesses by creating the tax credit, which intends to incentivize health insurance coverage by small business employers.  However, the sparse number of small businesses who were even aware of this component to the healthcare bill have expressed understandable dissatisfaction for several reasons.  Firstly, the qualifications for receiving the tax credit are extremely limited, and those who are eligible feel it is more of a hassle than it is worth. Small businesses must have fewer than twenty-five full-time employees and employees can’t be owners (e.g., sole proprietors or partners). Secondly, the eligible business must also pay at least half of the insurance premiums for employees.  The limitations do not end there.  The IRS must then conduct a series of calculations, so that the amount of credit received by the businesses is then allocated towards accountant fees. Goliath is on steroids.

Even businesses located within Massachusetts, the biggest state advocate for the ACA, will face serious threats to their survival. The majority of poor residents covered under The Massachusetts Health Connector, from which the new healthcare bill’s state exchange regulation is based, will be transferred to Medicaid coverage. As a result, the Connector is projected to lose seventy percent of its current clientele.  This means that the Connector will have less power to negotiate with insurers and will be obtaining significantly less revenue. Perhaps the end of the week has finally taken its toll and my quickly fading mind fails me, but are we not looking to promote market competition?

In light of David and Goliath, whose biblical moral translation is that anything can be accomplished with the help of God, conceivably the only chance for this underdog to succeed under the ACA’s enactment lies within a miracle granted by a higher power.

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