For the past four years, the U.S. Chamber of Commerce and other business organizations have conducted an unremitting campaign against the Affordable Care Act, warning that it would stifle enterprise, crimp hiring, and generally be a disaster. Now that more than 8 million Americans have signed up for coverage on the individual insurance exchanges, and another 3 million (at least) have enrolled in the expanded Medicaid program, you might think the carping would have died down a bit, but it hasn’t. The Chamber has dropped its calls for the 2010 health care law to be repealed, but it still runs ads and blog posts slamming the reform.
The Chamber’s hostile stance perhaps isn’t so surprising. In recent years, it’s moved so far to the right it has practically joined the Republican Party. But what is genuinely shocking is that more business leaders haven’t acknowledged a financial reality that’s becoming increasingly clear: Obamacare could well end up having a positive impact on their firms rather than a negative one.
Let’s start with small businesses, which are often portrayed as the main “victims” of the ACA. According to the Census Bureau, there are about 27.2 million of them. The overwhelming majority of these enterprises — about 26.6 million — employ fewer than 20 people. Since the employer mandate kicks in at 50 employees, Obamacare won’t affect these firms. But many of their employees will benefit from it. If they have a family and earn less than four times the poverty level, they are eligible for generous subsidies to purchase individual coverage. In effect, the federal government is giving these workers a pay raise, and relieving their employers of the pressure to provide them with health coverage.
That’s a big plus for small-business owners. But what about the large corporations represented by the Business Roundtable, another organization that has been highly critical of the ACA? Well, we know for sure that businesses involved in the health care industry, which makes up about a sixth of the economy, will benefit from having more customers and increased demand. As the accompanying chart shows, the stocks of health care companies have more than doubled since 2009. If Obamacare represented a threat to their business, this wouldn’t have happened.
That leaves big employers in other sectors, many of which provide their employees with health insurance: the auto companies, the retailers, and so on. What’s in the ACA for them? Understandably, many corporations are irked by the new taxes that were included in the reform, such as the reinsurance fee, the medical device tax, and the tax on “Cadillac” plans. They see Obamacare as adding to the costs and complexity of a system that’s already expensive and complicated. But what if the new law does what its proponents claim it will do and reduces health care inflation? Then the costs of transitioning to the new system could be recouped.
One way this could happen is if corporations start shifting their employees onto the insurance exchanges and pay the penalties for not providing coverage, which, while hefty, aren’t as costly as paying for insurance. A more likely outcome is that big employers start to use the insurance options that are available on the exchanges as models for their own plans, chipping away at the benefits they provide. Their employees won’t like the restricted provider networks and higher deductibles that typify plans sold through the exchanges, but they won’t be able to do much about it. As tens of millions of people eventually sign up through the exchanges, the policies available there are likely to become the new standard.
To some Americans, this will come as a big shock: They expect to be able to see any doctor they want, use any hospital they choose, and undertake any procedure they deem necessary. For most people, though, such a system is already a distant memory. The ACA is merely accelerating a trend that began with the rise of HMOs. Whether that’s good for patients is a controversial question. But it’s surely good for business.
John Cassidy is a Coins2Day contributor and a New Yorker staff writer.
This story is from the May 19, 2014 issue of Coins2Day .