June 28, 2012 at 2:30 PM ET
Tammy Krings doesn’t understand what the fuss is all about.
The small business owner from New Albany, Ohio thinks the Affordable Care Act the U.S. Supreme Court upheld Thursday will help lower the cost of providing health care to the 160 employees at her corporate travel agency, TS24.
“I was very happy about it,” Krings said after the court's decision. ”It will be positive for our organization.”
That puts her in stark contrast to small business advocacy groups, which argue that it will raise costs, add uncertainty to their businesses and put a damper on job creation.
Not so, says Krings. She said her company’s health insurance premiums will rise much more slowly than the 30 percent a year increases she’s been paying in recent years. By prodding younger, healthier workers to sign up for coverage, she said, the law will help offset the cost of covering older workers who consume more care.
“We don’t have the balance of healthy people on our program,” she said. “Our little business is, I think, a very micro example of what the country faces at large.“
Business groups reacted viscerally to the news that the high court upheld the law.
“Small-business owners are going to face an onslaught of taxes and mandates, resulting in job loss and closed businesses,” according to Dan Danner, President and CEO of the National Federation of Independent Business, one of the plaintiffs in the suit, which sought to strike down the law.
“Left unchanged, (the law) will cost many Americans their employer-based health insurance, undermine job creation, and raise health care costs for all," said U.S. Chamber of Commerce President and CEO Thomas J. Donohue.
“This law will have a dramatic, negative impact on every employer and employee in the United States and further constrain job creation and economic growth,” according to Matthew Shay, CEO of the National Retail Federation.
With Thursday’s ruling, the 2010 health care law will continue to be phased in over the next five years. When fully implemented, it’s expected to provide health coverage to about 30 million currently uninsured people, extending coverage to more than 9 in 10 eligible Americans.
Some provisions are already in effect. Young adults can stay on their parents' insurance up to age 26. Insurers can't limit how much a policy pays to each person over a lifetime. Co-payments for preventive care have been eliminated.
For months, small business groups have complained that uncertainty about the health care law had produced a chilling effect on job growth, as employers postponed hiring decisions until the law’s legal foundation was settled.
To be sure, some uncertainty remains. Various specific regulations, for example, have yet to be written by the Department of Health and Human Services.
GOP vows to press for repeal
Republicans have vowed to continue to press for the law’s repeal, a prospect that will depend heavily on the outcome of the November election. Even if they fail in that effort, the sweeping scope of the law makes it likely that Congress will make changes in the next few years as its wider impact is felt.
"There have to be some tweaks,” said Mike McAllister, CEO of Humana, one of the country’s largest health insurers. “This is a big bill and in these cases there are things that have to be done in the next handful of years to make it better.”
One of those “tweaks” will likely center on the tax breaks the bill provides for the smallest businesses, who have complained loudly about the $2,000 per worker penalty that the law imposes on companies that don’t provide health coverage. That fee is partially offset by a tax credit for companies with 25 or fewer workers.
Some opponents of the bill have argued the tax credit provision could prompt very small companies to stop hiring once they reach 25 employees, or even fire workers to take advantage of the credit.
Krings said that argument doesn’t make much sense. “Maybe I’m just not as smart as these other guys,” she said. “But the fact is when I need people I hire them regardless of a tax credit or a tax break. A tax itself does not dictate how I manage my business.”
Newly created insurance markets are expected to make it easier for individuals and small businesses to buy affordable coverage.
The law also includes provisions to shift some of the cost of health care from employers to their employees, who will spend more of their own money when they seek medical care. The goal is to prompt patients to shop around for care rather than consume health products and services without regard for cost.
“People will have cost sharing, which they will manage out-of-pocket,” said Robert Kocher, a guest scholar at the Brookings Institution. “That’s going to lead to market-based competition and tools coming on the market that show you the price that you'll pay for different providers. Those will vary by as much as 300 to 400 percent. That allows consumers to move towards the lower-priced, better-quality providers.”
Krings said she expects that cost sharing will help contain the overall cost of care and save money for companies like hers.
“Once you create that kind of transparency, that’s going to cause the consumer to take pause and say 'Wow: why is this so expensive?'” she said. “That’s part of what is broken. There hasn’t been this transparency. There hasn’t been the personal responsibility to care so much about it."
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