Small businesses to be devastated by huge increases in health insurance costs in 2014

Tuesday, December 31, 2013 by: J. D. Heyes
Tags: small businesses, health insurance costs, Obamacare

(NaturalNews) As reported by The New York Times, the Democrats are going to try to get the public's mind off of the costly disaster of Obamacare this coming election year by supporting large increases in the minimum wage.

"Democratic Party leaders, bruised by months of attacks on the new health care program, have found an issue they believe can lift their fortunes both locally and nationally in 2014: an increase in the minimum wage," the paper reported.

Well, if successful, that will create the perfect storm of doom for many small- and medium-sized businesses. Minimum wage increases, as noted by the Cato Institute, "usually end up harming workers and the broader economy. Minimum wages particularly stifle job opportunities for low-skill workers, youth, and minorities, which are the groups that policymakers are often trying to help with these policies."

The coming cost tsunami

Increases in the minimum wage, coupled with huge new costs associated with the implementation of Obamacare coverage mandates for workers, would be a double whammy - though Obamacare's costs will be bad enough, as reported by Politico:

Think the canceled health policies hurt the Obamacare cause? There's another political time bomb lurking that could explode not too long before next year's elections: rate hikes for small businesses.

It was bad enough that the Obamacare law's coverage requirements hurt millions of Americans by forcing their insurers to cancel existing plans because they did not meet mandated minimum standards.

Soon, the cost tsunami will strike in earnest. When the employer mandate kicks back in towards the end of the year (around election time - if Obama doesn't unconstitutionally delay it again), thousands of businesses will be required to cover their employees - at a cost far above what many of them will be able to afford.

What's worse, tens of millions who work for small businesses won't know it until it happens, but their premium costs will skyrocket as well.

If Obamacare does one thing well, it is the transfer of wealth: Many Americans' insurance premiums will go down, but only because they are going to be subsidized via higher rates paid by millions of others. That, in and of itself, will be an issue during the mid-term elections.

But beyond the politics of the law are real consequences for real people, and real businesses. Losing health insurance coverage, or being forced to pay thousands more per year for plans with higher deductibles, is seriously going to impact the bottom line of families - and companies.

Right now, it's hard to say how many companies - and how many employees - will be affected. But one thing is for sure - costs are going to increase.

"The biggest shocker for the small-business community is going to hit in October, which is interesting because it will be prime time for the election," Jessica Waltman, a top lobbyist at the National Association of Health Underwriters, told Politico.

In the coming year, small-business health plans (those that cover 50 employees or fewer) are going to have to comply with a host of new Obamacare rules and regulations, especially those that say businesses cannot be charged more by insurers if they have workers with existing health problems.

'You're going to have Joe the Plumber a thousand times over'

Premiums will nonetheless vary, depending on workers' ages, whether they get individual or family coverage, their ZIP code and whether they smoke or otherwise use tobacco. What's more, older workers cannot be charged more than three times what younger workers have to pay

More from Politico:

Those changes will be helpful to small businesses with older workers and employees with health problems, but they also mean that small firms with younger, healthier workers will have to pay more than they used to. The new small-business plans will also have to cover the same set of minimum benefits that individual health plans will have to provide, including pediatric care and mental health and substance abuse services.

"If you can't use health [to set premiums] anymore, some people will move down and other people will move up," Gary Claxton, director of the Health Care Marketplace Project at the Kaiser Family Foundation, told the news site. "If you're a group of three 21-year-old men, you'll pay more, because a group of three 64-year-olds somewhere else will be paying less."

"You're going to have Joe the Plumber times a thousand around the country saying, 'I got screwed,'" said a health insurance industry official who asked not to be identified in order to speak freely, Politico reported.

Sources:

http://www.politico.com

http://www.nytimes.com

http://www.cato.org