With health care making up nearly twenty percent of our economy, Americans are following the GOP’s American Health Care Act (AHCA) closely. Small businesses have a lot at stake. In the May 8, 2017 Inc.com article “Trumpcare Could Hurt Small Businesses”, Erik Sherman outlines the issues entrepreneurs should be tracking as the AHCA winds its way through the legislative process.
Since the May 4 House vote on the Trumpcare bill, a lot has happened. But one thing remains the same: the fate of the bill is in the hands of the Senate, and that legislative body remains determined to repeal and replace the Affordable Care Act (ACA), also known as Obamacare, this summer.
Sherman’s advice to small businesses? Understand the bill, of course. But there are two main issues he believes entrepreneurs should have on their radar.
Subsidies vs. Tax Credits
When Obamacare became law, federal subsidies made premiums for individual policies issued on the exchanges more affordable than small business group policies. As a result, coverage for many small business employees shifted from employer-sponsored to individual plans. But the Trumpcare bill proposes elimination of subsidies in favor of tax credits for individual policies. These credits are slated to be much smaller than the Obamacare subsidies, which may make it difficult for employees to afford individual policies. For small businesses who want to ensure their employees are covered, Trumpcare may require returning to employer-sponsored health plans.
Regulations vs. Regulations
Perhaps the biggest criticism of Obamacare has been rising medical costs. And to be sure, there’s some truth to that judgment. But the ACA also included regulations to address inefficiencies in the health care system. Sherman argues that the cost-reduction benefits of these provisions is just now beginning to be realized. The Trumpcare bill eliminates these measures, which could contribute to increased health care costs, should the bill become law.
While the Trumpcare bill seeks to eliminate these regulations, it seeks to add another, in the name of discouraging abortion. The bill restricts an Obamacare tax credit to small businesses with health care policies that allow coverage for abortion only “if the mother’s life is in jeopardy or in the case of a pregnancy caused by incest or rape”. This stands to put small businesses in the awkward position of making moral judgments on employees’ use of health care services.
Trumpcare has several hurdles to clear before becoming law. The Senate has moved from repeal and replace, to repeal, and back to repeal and replace at the urging of the President. With no Democrats in favor of the legislation, and with the Republicans having a very slim majority in the Senate, every vote counts. And the Senate has so far had difficulty balancing the desires of its most conservative and moderate members. Right now, it isn’t clear if there are even enough votes to open debate on the bill. And if debate does open, it’s unclear what changes may be required to make it palatable enough to pass the Senate.
But one thing is clear: While the Senate considers the Trumpcare bill, small business owners would do well to stay informed on how the AHCA will impact their businesses and their employees.
Bibliography:
https://www.inc.com/erik-sherman/gop-healthcare-bill-could-be-a-huge-small-business-problem.html
http://www.cbsmedicalbilling.com/
http://www.washingtontimes.com/news/2017/may/15/trump-ends-small-business-enrollment-healthcaregov/
