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Affordable Care Act – Why Small Business Wants It Gone

Post: Jun. 25, 2012

The short answer to this question is this: “Because they took a complicated, inefficient and expensive system for financing and delivering health care and made it more complicated, less efficient and more expensive.”

Here’s the longer answer.

For at least 40 years members of the Council of Industry have been frustrated by the health care system.  In the early 1970s we were so frustrated that the association helped to form one of the first Health Maintenance Organizations (HMO) in the state.  While that HMO worked to control costs for our members for a short while, eventually its ability to effectively manage care was greatly reduced by legislation mandating coverage, and regulations governing everything from reporting to premiums.

Our members have cried for relief for decades from the increasing costs of providing heath insurance to their employees.  To them the premium price increases they experience are random and not related to the experience of the lives they employ.  They compare this to their own ability to raise prices to their customers. that ability is greatly restricted by the fact that they have global competitors who are more than willing to keep prices low to gain market share.

Improved quality, expanded care, and lower costs are the stated goals of the Affordable Care Act and, no doubt, its authors and supporters believe they have created a system to achieve them.  Small businesses (the great majority anyway) beleive that it is competition that leads to efficiency, quality and lower cost. Seen through the eyes of small business the Affordable Care Act will not accomplish its goals because it requires no competition. It leaves tough decisions to bureaucrats instead of the marketplace. It attempts to micromanage complex systems. Taxpayers become the safety net for the expanded system. Small businesses pays taxes as well as premiums.

Why do small businesses want the Affordable Care Act gone? Because they know that markets, though clearly imperfect, work much better at building efficiency quality and cost control than bureaucracies.