Across America many small-business owners are cheering at the GOP win on repealing and replacing Obamacare. After years of debate, the House voted Thursday to repeal key parts of the Affordable Care Act and replace them with new provisions that change the way the federal government funds purchases of individual health plans and Medicaid.
Health care has become an ongoing source of pain for many small-business owners. It was the top issue owners wanted Trump to address in a survey of 700 owners and prospective buyers in late February by BizBuy Sell, a marketplace for small businesses.
Among respondents, 60 percent favored an ACA repeal. The major reason: spiraling health insurance premiums — often a result of insurance companies fleeing the marketplace.
It is a trend affecting business owners in all states. Ross Coulter, 49, and his wife, who run a two-person public relations firm in Dallas, have been hunting for a new health insurance plan after Humana notified them it was discontinuing their current one. They had no immediate plans to slow their search after the House vote. They are looking for an affordable replacement by July 1 for the high-deductible plan, for which premiums are $900 a month for the couple and their three children.
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“The only plans that are comparable would be a $400- or $500-a-month increase,” says Coulter, who is now considering options like a Medi-Share plan, run by Christian Care Ministry, in conjunction with a cancer-coverage policy.
Some Americans who have bought high-deductible plans to lower their premiums — a popular strategy amidst rising premiums — have found that high out-of-pocket costs make getting medical care unaffordable. When Paula Muto, a vascular and general surgeon in Lawrence and North Hanover, Massachusetts, looked into unpaid bills in her solo private practice recently, she found that many were for patients who had high-deductible plans. “It was the people with insurance, that couldn’t pay the deductibles, that weren’t paying us,” she says.
So what changes are small-business owners looking for in a revised federal health-care bill? Topping the list is the overturn of the individual mandate that requires employers with 50 employers or more to provide health care or pay penalties. Paul Entin, 48, owner of EPR Marketing, a two-person marketing firm in Bloomsbury, New Jersey, is among those who chaffed at being forced by the federal government to buy health insurance. He purchased a high-deductible plan for his family. “The individual mandate is the most important issue to me,” he said.
Entrepreneurs are also hoping the legislation will protect people with preexisting medical conditions. There is concern because, as the bill stands now, states will be allowed to waive rules that stop insurance companies from charging higher premiums for people who have preexisting conditions if they set up a high-risk pool.
“Younger, healthier and middle- to higher-income self-employed workers will do better,” says Steve King, a partner in Emergent Research in Lafayette, California, which studies independent workers. “Older, poorer and less-healthy self-employed people will likely do worse.”
“They’re trying to rip pieces of legislation out that you can’t rip out,” says Marc Snyderman, 45, a self-employed attorney in Voorhees, New Jersey, who started his firm in August and gets his insurance through COBRA. “The pieces they are going to rip out are going to change the course of how insurance is delivered.”
Until the dust settles and a new federal health plan is introduced, small-business owners are trying to figure out what interim strategies make the most sense to insure their families and employees.
“Clients have already started to call and email me. I’ve been advising them sit tight and don’t get too stressed about this,” said David Lewis, president and CEO of OperationsInc, a human resource outsourcing and consulting firm in Norwalk, Connecticut. Lewis believes the outcome of the bill will be unclear until it comes before the Senate and gets sent back to the House.
“Right now, because Obamacare is still the law of the land, we’re advising our clients to just stay the course — offer the health insurance and make sure that it’s affordable and that it provides what is called minimum essential coverage,” said CPA Steven Goldstein, an audit partner at Grassi & Co., an accounting firm in the New York City area, prior to the vote. “By doing that, you will keep the IRS off your back.”
Although the House approved the bill, “it’s not going to get to the Senate for weeks, if not months,” says Goldstein. “And it is going to be drastically modified under its current provisions.”
Staying the course
In the meantime, to rein in costs, business owners are opting to buy high-premium policies or self-insure.
Genia Gore, for instance, has become an expert at reigning in healthcare costs at family run Gore Travel Plaza — a large gas station in Seiling, Oklahoma — and Gore Nitrogen, a company that delivers nitrogen to oil wells.
Instead of providing a conventional health-care plan to the full-time employees at the 100-employee filling station and 80-employee nitrogen delivery service, Gore and her co-owners have opted to self-insure.
Eligible employees have access to a direct primary-care physician, a service for which the company pays a monthly per-person fee. For medical procedures like colonoscopies, Gore turns to a service called MDSave, where she can prepurchase them at a discount.
“I know what I’m paying,” says Gore. “I can compare that price to other places, and I’ll even bargain with them.”