Small businesses might drop Obamacare as premiums skyrocket

John Hugh DeMastri, DCNF

Health insurance premiums offered under the Affordable Care Act (ACA), colloquially known as Obamacare, will rise next year, hitting small businesses particularly hard and potentially pressuring them to drop out of the program.

While recent provisions in the Inflation Reduction Act have provided additional subsidies for individual consumers that will likely offset the increased cost of premiums, no such support was granted to small business owners, according to the Wall Street Journal. Insurers are proposing median premium increases of 10%, but some are proposing increases as high as 20%.

Proposed price increases on small businesses in Minnesota range from 2% to 15%, while those in Florida range from 4% to 12%, according to the WSJ. New York insurance companies, meanwhile, are proposing increases ranging from 11% to 46%.

Rates put forward for individual consumers can change and need to be certified by regulators from their respective states, with the federal government set to certify these plans in October, the WSJ reported. While individual consumer plans are negotiated by the several states, small businesses have to negotiate with healthcare providers directly, and typically lack the negotiating power of larger corporations to help keep premiums down.

Small businesses are not required by law to provide health insurance, and rising premiums could lead them to drop coverage altogether, said the WSJ, citing financial analytics firm Moody’s. At the same time, one small business owner from Cincinnati told the WSJ he simply had to eat some of the cost, passing the rest onto employees for fear of dropping benefits in a tight labor market.

Since March 2020, coronavirus emergency measures made it so that all individuals enrolled in Medicaid were guaranteed “continuous eligibility” for the duration of the emergency, even if they might otherwise be considered ineligible, according to the Kaiser Family Foundation. Should the emergency measures be revoked, around 13% of all current enrollees would be unenrolled.

The Centers for Medicare and Medicaid Services stressed in a March 2022 letter the importance of the transition to a post-emergency state, outlining a variety of measures designed to ensure the transition goes smoothly. While the HHS has said it will warn states 60 days in advance of any conclusion to emergency members, state officials told the WSJ they had yet to receive notice of plans to draw down emergency measures.

The Department of Health and Human Services did not immediately respond to the Daily Caller News Foundation’s request for comment.

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