Cablayan LNHA, MHA

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As Medicaid Enrollment Increases, So Do Costs to Employers

March 3, 2015Erwin Cablayan0 Comments

small business

Days ago, the Department of Health and Human Services released a report that “Nearly 10.8 Million Additional Individuals Enrolled in Medicaid as of December 2014.” While HHS touts these numbers as a great achievement of the Affordable Care Act, it is worth examining the full implications of these numbers.

HHS boasts that their statistics “affirm the fact that the Affordable Care Act is working and is truly an important part of the everyday lives of millions of Americans. Individuals finally have the financial and health security that comes with affordable health coverage.” While it may be true that more Americans have coverage, which is a great achievement in taking care of our own, what are the other implications of the Affordable Care Act, and what does it mean on a macro level?

One question is the financial impact of the Affordable Care Act on small business, the drivers of the U.S. economy. According to the Small Business Administration, small businesses account for “64 percent of net new private-sector jobs” and “49.2 percent of private-sector employment”. While you may not consider a 50-plus-employee business, or a 400-employee for that matter, a “small business,” the fact is that these businesses under 500 employees provide jobs to millions around the country.

Referencing group health insurance Forbes contributor Holly Magister writes about employers with less than 50 workers and how they were affected, using data from “If I do the math, that’s nearly 5.6 million small business owners in the United States who are experiencing an increase in costs. That certainly feels like a penalty to me.” In regards to penalties levied on larger small businesses, asserts that “Universal health care is hardly “free,” and its costs hit both employees and customers hard,”reporting decreases in employees’ hours, an increased risk in going out of business, and costs being passed on to consumers.

With the increasing costs of providing meaningful jobs, let alone benefits the question is: Are the lower and middle classes really better off than before Obamacare?