Latest Obamacare Delay Hurts Small Business and Their Workers

June 11, 2014

By Akash Chougule

Obamacare’s effect on small businesses just got a lot messier. The Obama administration is considering whether to let at least fourteen states delay the Small Business Health Options Program (SHOP) – for a second time. The SHOP exchange was meant to provide small business employees with multiple health insurance options, and thus encourage businesses to cover their workers. But now, with the website yet to get off the ground, the White House is considering allowing states to delay launching the program until 2016.

Without SHOP up and running, competition decreases for the health insurance options available to small business employees. Not only does this hurt employee choice, but reduced competition means increased prices – and increased prices means slower economic growth, more wage stagnation, and fewer jobs created.

Worse, this news comes as much of the country braces for a whole new round of health insurance cancellations – this time, employer-based plans. Analysts predict that almost 80 million people could lose employer-based care. Now, the problems with the SHOP exchange will make it even more difficult for employees to acquire employer-based insurance that they like, and make it less attractive for businesses to provide insurance rather than dumping employees onto the individual market.

SHOP was already delayed this year for most of the states on the federal exchange. Another delay would not only further undermine Obamacare, but it would undermine SHOP and make the federal health care law more inconsistent from state to state and even more complex for small business.

Obamacare was already an enormous headache for American businesses. The employer mandate – which itself has been delayed twice – will cost businesses $52 billion. As a result of the cost on business and its lack of effect on the uninsured rate, experts on both sides have proposed scrapping the requirement. However, the employer mandate isn’t the only burden Obamacare places on businesses – the law imposes dozens of other new taxes, costs, and regulations. The Congressional Budget Office estimates the law will kill the equivalent of 2.5 million jobs, obviously something the country cannot afford as the economy flounders in the lowest workforce participation rate since the 1970s.

Small businesses are truly the backbone of the American economy. They are responsible for 70 percent of new jobs in the United States, and give millions of people their first opportunity at not just entrepreneurship, but a job and career mobility. Unfortunately, as with many of this Administration’s actions, the consequences of the policy and the bureaucratic ineptitude are hurting those they purport to help.

Small businesses are struggling, wages are stagnating, and joblessness remains high. Obamacare’s policy effects are exacerbating all of these problems, and the Administration’s inability to even administer its own law is only adding to the nightmare Obamacare has become for millions of Americans.

Like this post? Chip in $5 to AFP