Wall Street Journal: Save Small Business from Obamacare
By Reps. Sam Johnson (R-TX) and Tim Walberg (R-MI)
Aetna CEO Mark Bertolini warned last month that the Affordable Care Act is in a “death spiral.” Because ObamaCare is failing, we are debating how best to repeal and replace it. But amid this debate, it’s important to remember the people ObamaCare is hurting.
Here is what Kathy, who owns a company in Missouri, told the House Ways and Means Committee: “As a small business owner, I recall the days before the ACA when we would receive a 2-inch notebook that contained multiple quotes from different health insurance companies. Now, our options are listed on a single legal sized sheet of paper. We only received three quotes for 2017, and just two of them were adequate for our region. In 2013, our insurance cost $180,000 for 92 lives with a $2,000 deductible. In 2016, we paid $252,000 for just 61 lives who face a $5,000 deductible.”
Her story, unfortunately, is not unique. Under ObamaCare’s costly regulations, many business owners must make hard choices between cutting back employees’ hours, laying off staff, or dropping health-care coverage (and then paying a penalty for doing so if the firm has more than 50 workers). Among businesses with fewer than 10 employees, 35.6% offered health insurance in 2008. That figure had fallen by 2015 to 22.7%, according to the Employee Benefit Research Institute.
Even worse, a January report from the American Action Forum found that since ObamaCare became law, “among small businesses, the rise in premiums has been associated with $19 billion in lost wages, 10,130 fewer business establishments, and nearly 300,000 lost jobs.” That’s a big problem for American families, particularly since small businesses are responsible for 55% of all jobs and 66% of all net new jobs.
Repealing ObamaCare is necessary and would certainly help small businesses grow and hire new workers. But Congress should also help these job-creators provide affordable health-care options to their employees. That’s why we introduced the Small Business Health Fairness Act, which the House is scheduled to vote on this week.
The legislation is built on a basic rule of insurance: The bigger the risk pool, the lower the premium. That’s why large corporations and unions have an advantage in providing health insurance to their employees and members. Our bill would allow small businesses to band together through association health plans, or AHPs, to provide good policies for workers and their families at a lower cost.
AHPs could function in one of two ways: They could work directly with an insurer to negotiate better rates. Or they could self-fund, just as many large corporations and unions already do. Self-funded plans would also be exempted from many costly state and federal requirements, just as many corporate and union plans are.
To ensure the success and fairness of AHPs, our bill includes requirements that would provide accountability, stability, and consistency across the country. Any active marketing by an AHP sponsor would have to be directed at all its members, regardless of their claims history or health status. AHPs would be restricted from setting premiums in a way that might raise costs for higher-claims companies compared with similarly situated employers in the plan.
As House Republicans work to repeal ObamaCare and alleviate the burden it places on Americans across the country, we hope that AHPs can be a central part of the effort. Passing our bill is a common-sense way to give small-businesses the same economies of scale in health insurance that Fortune 500 companies enjoy—with the result being more affordable coverage for workers and their families.
This op-ed originally appeared in the March 21 edition of the Wall Street Journal.