The Patient Protection and Affordable Care Act tackles many of the serious problems small business owners face, including escalating health care costs, lack of access to affordable coverage, and limited choice among health plans. We support the full implementation of the plan, which benefits both small businesses and the economy as a whole. We applaud the Supreme Court’s decision to affirm the constitutionality of the Act and call on all states to move ahead with its implementation.
The Patient Protection and Affordable Care Act (PPACA), widely called Obamacare, was signed into law by President Obama on March 23, 2010 and its constitutionality was affirmed by the Supreme Court on June 28, 2012. It represents the most significant regulatory change to the U.S. healthcare system since Medicare and Medicaid.
The main benefit of PPACA will be to decrease the number of uninsured Americans and provide them with health care more efficiently. It uses a mixture of mandates, subsidies, and tax credits to encourage individuals and corporations to purchase coverage, and it protects hard-to-insure populations including those with pre-existing conditions. Other components of the legislation will improve healthcare practices and encourage evidence-based decision-making.
What’s at Stake
The Affordable Care Act will help strengthen our still-weak economy. By closing the coverage gaps that currently leave 40-50 million Americans uninsured or badly underinsured, the Act will help restore consumer confidence and consumer spending. It will enable people to be more productive and focused when they're at work. By reducing the burden of high health insurance costs on business, the Act helps U.S. companies compete with companies that operate where healthcare is government-paid. By taking steps toward rationalizing the healthcare delivery system, the Act will start to wring out excessive costs. Today the U.S. healthcare system costs about 18 percent of GDP compared to 10-12 percent in most developed countries. These excessive costs put the United States at a severe competitive disadvantage, and they don't provide any increase in lifespan or health.
The Act protects and supports small business in several ways. It enables small business to tap the same economies of scale that large businesses enjoy, greatly reducing their health care costs. It provides tax credits for purchasing health insurance for employees. It exempts businesses employing 50 people or fewer from having to provide coverage, if the owner does not feel the tax credits are sufficient.
Beginning January 2014, under the Affordable Care Act, all 50 states and the District of Columbia will have implementations of new health insurance exchanges. Exchanges are marketplaces, run either in person, by phone, or over the internet, where people without health insurance can go to select a private health plan. Open enrollment in the exchange programs will begin in October of this year and is estimated, by the Congressional Budget Office, to have 25 million citizens signed up by 2022. States were given three options of exchange. They could either establish their own state-run exchange, have the Department of Health and Human Services [HHS] operate a “federally facilitated” exchange, or they could partner with the HHS and run a state-federal partnership exchange. As of December 14, 2012, states had to submit applications to HHS in order to operate their own exchanges, and have until February 15, 2013 if they choose to pursue a federal-partnership exchange.
As of now, 18 states, along with the District of Columbia, have submitted applications for state-run exchanges, including California, Colorado, Connecticut, Hawaii, Idaho, Kentucky, Maryland, Massachusetts, Minnesota, Michigan, Nevada, New Mexico, New York, Oregon, Rhode Island, Vermont, Utah, and Washington. Every state, except for Mississippi (who has not received it’s approval letter) has approval from the HHS. 6 other states have pursued state-federal partnerships, including Arkansas, Delaware, Illinois, Iowa, North Carolina, and West Virginia. 3 states, Florida, Michigan, and North Dakota, have made no official decision, while the remaining 23 states have indicated no state-run exchanges, and have yet to decide on whether or not they will pursue federal partnerships. The HHS is supporting these efforts with widespread, multimillion dollar grants, and by October of this year, states should have decided upon their exchange programs.
Ongoing advocacy will be needed to overcome lingering resistance and political maneuvering. Policy makers have been assaulted with misinformation implying that Obamacare will hurt business. They need to hear from small business owners and other business leaders about the importance of expanding coverage in order to renew consumer confidence and restore demand. They need to be pushed toward further reforms to bring U.S. spending on health care in line with the rest of the developed world.