Obamacare has been a boon to the nation’s insurance companies, expanding the number of Americans with coverage, but small businesses are “getting crushed” by soaring health costs tied to the controversial law, a leading U.S. health policy and insurance consultant says.
Russ Carpel, CEO of the healthcare consultant company Level Funded Health, tells Newsmax TV’s Newsmax Now that the Affordable Care Act has driven up insurance costs for employers dramatically since its passage in 2010 — expenditures that are hitting small businesses particularly hard.
“What we're seeing is health insurance premiums skyrocket anywhere from 20-200 percent year over year on these traditional small group health insurance coverage plans that these small businesses are in today,” says Carpel, whose company was created to help businesses navigate new benefits mandated under Obamacare.
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“The ACA was enacted, the health insurance carriers were afraid they were going to be on the menu and said ‘Let's get to the table, let's get to Washington, let's work with the president,’ and therefore companies who dominate the market share in this arena and this sector are seeing record profits,” Carpel notes.
“They've figured it out and the small business didn't. Unfortunately, they're getting crushed.”
Under Obamacare, companies that employ 50 or more full-time workers must provide health benefits that meet higher standards than were required before the law’s passage or pay a $2,000-per-worker fine to the IRS.
As a result of the new rules, many companies that provide health benefits have faced higher health insurance costs and passed those premium increases along to their workers. By some estimates, hundreds of other U.S. companies have cut health benefits, reduced worker hours, and eliminated coverage for part-timers, worker spouses, and retirees to cope with the law’s employer mandate.
Carpel tells Newsmax Now that 83 percent of some 2,500 businesses Level Funded Health recently polled said they find it challenging to offer competitive health benefits.
“I would say the number one reason is healthcare cost skyrocketing — and therefore health insurance cost skyrocketing — but what the ACA has really failed to accomplish is to get healthcare cost under control,” he says.
“And really the new methodology — the new way that the health insurance carriers come up with their health insurance premiums — really penalizes small business more than it does health [insurers] and then in turn it penalizes their employees.”
Carpel notes that health insurance costs for a small businesses are the second largest line of expenses.
“At the same time, it's the single most sought out … employee benefit for any company, far surpassing 401K or pensions or anything similar to that,” he explains.
As a result, for many small businesses Obamacare’s employer mandate “really…backs them into a corner.”
He adds: “They're being mandated if they have 50 or more employees to offer health insurance, but at the same time, the costs are skyrocketing which is hindering their ability to attract and retain the top human capital.”
Small businesses have historically faced higher insurance costs than medium-sized and larger employers, in part because they have fewer resources and a smaller pool of workers with which to negotiate prices with insurers.
“Since the premiums are spiking so much on these small businesses, they're the ones that are bearing the brunt of this financial burden…[while] big business like Blue Cross — [and] folks like this that dominate the market share and the small group health insurance market — are seeing record profits because of the ACA,” Carpel says.
Citing recent comments by GOP presidential candidate Florida Sen. Marco Rubio, Carpel argues that “big government” policies invariably hurt the little guy.
“That's what happened with [the] Dodd-Frank [Act]. Big banks are benefiting to the expense of small businesses who are no longer able to get affordable lines of credit,” he explains. “The same thing’s happening here with the ACA.”
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