What small businesses want from Obamacare repeal: lower premiums, more options

Small businesses cheered when the U.S. House voted in March to repeal major parts of the Affordable Care Act, which many business owners say inflicted more aches and pains than it cured.

Health care was the top issue business owners wanted President Trump to address in a February survey of 700 owners and prospective buyers by BizBuySell, a marketplace for small businesses, CNBC reported. Sixty percent favored a repeal of Obamacare, whose major provisions took effect in 2014.

Small business owners in Charlotte describe soaring premiums, administrative burdens and shrinking healthcare options under the mandate that those with 50 or more full-time employees provide coverage.

“It’s been brutal for small employers,” said Cathy Graham, director of benefit services at The Employers Association, a Charlotte firm that provides human resources services.

Business owners who favor repeal of Obamacare don’t necessarily cheer for the House version, which Democrats have attacked and the Senate is expected to rewrite. The non-partisan Congressional Budget Office estimated this week that the bill would leave 23 million more Americans without insurance and others with costly medical conditions unable to afford coverage.

Obamacare-compliant health plans cost businesses at least 30 percent more, Graham said, and bring annual premium increases of 25 percent to 40 percent. Small employers are forced into community-rated systems that increase costs for businesses with older workers, she said.

Some firms have limited hiring to stay under 50 employees, Graham said. Others have dropped health coverage, a move that can hurt companies as they compete for employees, and raised salaries to help reimburse workers who buy their own plans.

Dropping the employer mandate and limiting the “essential” benefits spelled out in Obamacare could reduce those costs, she said. But she added: “In what I’ve read so far, for smaller employers I don’t see any real benefits unless the cost of health care itself goes down.”

The National Federation of Independent Businesses, which unsuccessfully sued to overturn Obamacare, said the House repeal provisions “clear the way for additional reforms to make health care affordable, flexible and predictable.”

At dozens of roundtables the association held across North Carolina, said state director Gregg Thompson, small businesses reported premium increases of 10 to 40 percent a year due to Obamacare. Many businesses reported reducing their workforces, even when they needed to hire as the economy improved.

The association wants Congress to remove caps on how much small businesses can contribute to help employees buy insurance on their own. It says individuals and employers could wield greater negotiating power if they’re allowed to band together in large “risk pools.”

A trio of small businesses in Charlotte tell their Obamacare stories:

Government dictates

In 2013, at the cusp of the employer mandate, Henderson Properties was just below the 50-employee threshold and considering a hiring freeze to stay there. The real estate services company instead hired independent contractors and part-timers.

“Then after probably a year of struggling with that and not hiring people when we really needed to hire, I finally said the heck with it,” owner Phil Henderson said. “I can’t let the government dictate how I run my business.”

The company is now at 62 employees and still offers health insurance, as it has for 17 years. “What (Obamacare) did change was not only our bottom line but our employees’ take-home pay,” Henderson said.

Premiums that previously rose 5 to 6 percent a year have averaged 22 percent increases under Obamacare. To help absorb the increases, the company changed the share of health care costs it pays from 75 percent to 50 percent. It also moved to a higher-deductible plan to reduce workers’ contributions.

Henderson said he would continue to offer insurance if the mandate is repealed, but thinks his costs would go down if the government is less involved in health care markets.

“As a business owner and consumer, I would like to see market-driven approach just like other goods and services where I have choices and the consumer knows exactly how much it’s going to cost,” Henderson said. More transparency, he predicted, would drive costs down and improve competition.

Grow or die

Undaunted by the mandate, Wiki Wiki Carwash closed an acquisition in November and added a Greensboro store this year, going from three stores to seven and growing its workforce from under 30 to 65 people. “You’re either growing or you’re dying,” said president Anna Gacevich.

With the added healthcare costs, “it’s almost like we could take the seventh store, burn it to the ground and come out the same,” Gacevich said. “But we didn’t let it stop our growth, because I plan on growing more.”

Despite not knowing what health care will cost the company in the future, Gacevich said she’s at peace with the decision. As a libertarian-leaning Republican, she favors a single-payer healthcare system, which she thinks will cut waste and put the U.S. in step with other industrialized countries.

Admin headaches

Park Inc. has 300 employees, most of them part-timers. The parking management company offers healthcare coverage to salaried employees and, under Obamacare, to full-time hourly employees. With a predominantly college-age staff, only about 10 percent of those eligible took the benefits.

While dollar costs under the mandate have been less than president Brian Haupricht expected, the administrative costs of compliance have been expensive and vexing.

“We way underestimated how much time it was going to take us behind the scenes to manage all this,” he said. “One of the frustrations, even prior to Obamacare, is that it’s so complicated. And when you try to get answers even (insurers) don’t fully understand.”

This story was originally published May 25, 2017 at 5:24 PM with the headline "What small businesses want from Obamacare repeal: lower premiums, more options."