CBO Estimate Shows American Health Care Act Will Raise Insurance Costs for Entrepreneurs
The Congressional Budget Office (CBO) today released its report on the fiscal and practical impacts of the proposed replacement for the Affordable Care Act (ACA), known as the American Health Care Act (AHCA). The CBO estimate indicates that the AHCA would be a disaster for small businesses as it would cause the insurance market to implode and prices for health coverage to skyrocket.
According to the CBO report, the AHCA could result in as many as 24 million Americans losing health insurance coverage by 2026, and individual premiums for non-group plans could increase by 15-20 percent. If these events come to pass, only the sickest Americans will seek to buy coverage. As a result, the number of plans available to small businesses would shrink and the cost of buying these plans would increase drastically. What’s more, solo entrepreneurs would likely be priced out of the insurance market entirely if non-group premiums increase at the projected level. This means numerous fledgling firms would shutter while others would never get off the ground.
We believe the ACA can be improved, but replacing it with the AHCA will impede entrepreneurial activity and reduce job growth. The legislation will make health insurance less attainable and affordable for many entrepreneurs and their employees. It also significantly rolls back Medicaid, which currently covers many small business workers. What’s more, the proposal penalizes small employers that hire older workers by charging those businesses up to 500 percent more for older employees than younger ones.
Small employers don’t want or need another healthcare overhaul, especially one that takes so many insured Americans out of the market. Instead, entrepreneurs need quality, affordable health coverage for themselves and their employees so that they can focus on running their businesses. As the CBO’s estimate shows, lawmakers would be wise to abandon this proposal in favor of policies that will actually help America’s job creators.
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Small Business Majority was founded and is run by small business owners to focus on solving the biggest problems facing small businesses today. Since 2005, we have actively engaged small business owners and policymakers in support of public policy solutions, and have delivered information and resources to entrepreneurs that promote small business growth and drive a strong economy. We regularly engage our network of 55,000 small business owners along with a formal strategic partnership program of more than 150 business organizations, enabling us to reach more than 500,000 entrepreneurs. Our extensive scientific polling, focus groups and economic research help us educate and inform policymakers, the media and other stakeholders about key issues impacting small businesses and freelancers, including access to capital, taxes, healthcare, retirement, entrepreneurship and workforce development. Learn more about us on our website and follow us on Twitter, Facebook and Instagram.