The bitter fruits of Obamacare
by Jim Sensenbrenner
May 11, 2016
Source Journal Sentinel
Main Street is the epitome of the American dream. It's the culmination of years of painstakingly hard work, dogged determination, and the desire to succeed. These things have defined America since its conception. For more than 200 years, we have been a nation of doers, and nowhere is that more apparent than in our small business sector.
The United States is home to roughly 28 million small businesses. They represent more than 99% of all employers and employ half of all private-sector workers. They provide roughly 70% of net new jobs annually, pay 44% of the total private payroll in the United States, and produce an approximate GDP of $6 trillion.
America's small businesses drive our economy. They employ our citizens, provide vital services, and create products that improve our lives. Yet, despite the powerful impact they have on this country, small businesses are struggling under the heavy hand of Big Government. The burdensome regulations pushed on small businesses by President Barack Obama's Affordable Care Act, popularly known as Obamacare, are the most significant in recent years.
The Congressional Budget Office predicted that the combination of subsidies, taxes and Medicaid expansions would discourage work, reduce labor, and cut aggregate compensation. Conversely, President Obama promised that his signature legislation would mean "more choice, more competition, and lower costs for millions of Americans." The president also claimed that "if you like your health care plan, you can keep it."
It turns out that the CBO prediction was right, while the president received Politifact's "Lie of the Year" in 2013 for his broken promise to the American people.
Plans available to employers vanished as the law was implemented — replaced with more expensive alternatives. Nearly two-thirds of people with health coverage have employer-sponsored plans, resulting in significant costs for business owners. As health insurance premiums continue to increase, small business owners are faced with difficult choices concerning what coverage, if any, they will provide their employees.
In a 2014 study conducted by Devon M. Herrick, senior fellow at the National Center for Policy Analysis, Herrick found that employers pass increased health care costs on to workers, such as higher co-payments, delayed hiring, and reduced work hours. All these things mean less money for middle class families.
When forced to choose between their bottom lines or covering higher employee health care costs, many employers opt to drop coverage all together because it is more cost effective to pay noncompliance penalties to the IRS than absorb the heightened financial burden. Other business owners choose to forgo expanding their companies in order to remain under the 50-employee threshold dictated by the law, allowing them to abstain from offering employee health insurance at all. Still others reduce workers' hours in efforts to curb costs. Again, these realities mean less opportunity and lower incomes for middle class families.
These options not only harm national, state, and local economies, but also handicap innovation and growth while putting unnecessary burdens on the American people.
Six years of the Affordable Care Act have negatively impacted the states, and although Gov. Scott Walker had the foresight and common sense to reject Obamacare's Medicaid expansion, opting for a more creative, state-centric plan, Wisconsin small businesses are still feeling the pain of the law's mandates.
At the time his study was released, Herrick found that about 10,000 Wisconsin workers would lose or leave small group employer plans due to regulations in the Affordable Care Act by this year. He also found the average cost of a family employer plan in Wisconsin to be higher than those of 42 other states.
It is no surprise that the majority of Americans disapprove of the president's health care law. According to a recently published Pew Research Center national survey, 54% of respondents said Obamacare has had a mostly negative impact on the country. Congressional Republicans have put forward many repeal efforts, all of which have either been blocked by Democrats or vetoed by President Obama.
The Affordable Care Act has been a disaster for our country. As we look forward to the future, it's clear that the nation's economic success rests heavily on the ability of our small businesses to grow and flourish. In order for that to happen, we must repeal and replace Obamacare, free our businesses from its onerous regulations, and pursue a limited government, free market approach to our health care.
U.S. Rep. Jim Sensenbrenner, a Republican, is from Menomonee Falls.