Small Businesses Still Sour on Health Care Law

Gallup finds that 48% of small business owners think the Patient Protection and Affordable Care Act (PPACA) “is going to be bad for their business,” while 39% don’t think it’ll have an impact. Fifty-five percent of those polled think the health care law will increase their health care costs, while only 5% think they'll pay less.

I think many of the 39% that do not think the law will have an impact on their businesses don’t fully grasp how it will affect them. CBS News’ Jan Crawford reported on the confusion many small businesses, and a Los Angeles bakery in particular, have with the law.

Lisa Scherzer at Yahoo’s The Exchange blog points out some additional data showing confusion with the law:

A survey conducted in February by eHealth of 259 business owners with fewer than 50 workers found that almost a third (32%) of respondents incorrectly believe they’ll be required to provide group insurance in 2014, and 24% think they’ll be taxed if they don’t.

“There’s clearly a significant amount of misinformation floating around affecting a number of employers and making them panic,” says Linda Blumberg, a senior fellow of the Urban Institute’s Health Policy Center.

“So many small-business owners are confused about this, but there’s an appetite to learn about it,” says Kevin Kuhlman, manager of legislative affairs at the National Federation of Independent Business. No doubt in part because of this confusion, in February the SBA launched a site to help educate business owners on the new law.

Consumers are baffled, too. A Kaiser Family Foundation survey from March found that, three years after the law’s passage, a majority of Americans (57%) say they don’t have enough information about the ACA to understand how it will affect them.

What’s very disturbing from this poll is 41% said they’ve held off on hiring workers, and 38% said they’ve pulled back on growing their businesses because of the law. The U.S. Chamber Small Business Outlook Survey found similar hiring pessimism.

Confusion with the law’s implementation is only part of why there’s such negativity toward the law. The law also contains things like the Health Insurance Tax (HIT) starting January 1, 2014. Randy Johnson, U.S. Chamber Senior Vice President, Labor, Immigration, & Employee Benefits, Randy Johnson wrote:

[T]he HIT singles out health insurance policies purchased on the fully-insured market where eighty-eight percent of small business owners purchase their coverage. Not only will this tax be shifted to small businesses, but it will also raise the cost of health care for their employees. A study by former Congressional Budget Office director Douglas Holtz-Eakin shows the HIT will cost families about $5,000 in higher premiums over the next decade.

There are also billions of dollars in new taxes imposed to pay for the law.

Despite the “train wreck” of the health care law, there are ways to reform the system to expand affordable coverage and not damage the economy:

• Expand the options of where and how consumers access care
• Develop “patient-centered reforms” that better coordinate care  
• Establish systems to give consumers information to make informed choices
• Encourage employer wellness programs to improve their employees’ health
• Reform the medical liability system

We have to move ahead with advancing policies that lower cost, improve quality, and expand access.