Small Biz Gets Health Care Prognosis

The operation Congress has performed on health care could lead to healthier small businesses and employees, studies show.

Image: Istockphoto

No wonder Americans can’t figure out if they love health care reform or hate it.

Even the experts, depending on what aspect of the massive law passed earlier this year they examine, are sending mixed signals as to how many Americans will gain insurance as a result. And as far as can be determined, both sets of experts are right. Still, either way new research looks at it, small businesses and their workers benefit from the Affordable Care Act passed this year by Congress and signed by President Barack Obama.

A nonpartisan research foundation, the Commonwealth Fund, found in a report released this morning that 16.6 million workers toil at small businesses that will be eligible for a tax credit to help them get insurance. Great news for small businesses and their workers, right? Well, maybe not as much as you'd think.

The researchers found that the tax credit won’t be big enough to prompt many small businesses that don’t already provide the benefit to start providing it. Only 3.4 million workers, fewer than a quarter of those eligible, will likely get health insurance under the tax credit. Chances are, their bosses already provide health care coverage, but will merely be able to get a tax break for it now—a boost for small business, to be sure, but not exactly universal coverage.

Still, the Commonwealth Fund authors say, there will be immediate benefits thanks to the tax credits. They will provide $40 billion in support for small businesses over the next four years, and reduce insurance premiums by 8 to 11 percent by 2016.

"The Affordable Care Act is a big step forward for small businesses and their employees," said Commonwealth Fund president Karen Davis in a release. "Not only will business owners see immediate benefits from the tax credits, but owners and employees alike will be protected from steep premium increases and high out-of-pocket costs, ensuring they will have access to the stable, secure health insurance they deserve."

Another study of another aspect of the law, which runs to more than 1,000 pages, shows it will indeed mean more Americans, especially those working for small businesses, will wind up with insurance as a result.

Health policy researchers at the Rand Corporation conducted a simulation published in the New England Journal of Medicine to see what employers were likely to do once health insurance is available through giant insurance exchanges that will come online in 2014 and found encouraging results for workers at small businesses.

The proportion of all workers with health insurance is likely to jump from 84.6 percent to 94.6 percent, with most of the growth coming in the small-business sector. About 60.4 percent of workers at small businesses now have access to health insurance through their employer. That percentage will increase to 85.9 percent when the exchanges are established—mainly because insurance through the exchanges will be less expensive.

In raw numbers, the exchanges will mean 13.6 million more workers, 10.4 million of them at small businesses, will be able to buy health insurance, the Rand study shows.

"The probability of being offered coverage increases proportionately more for workers at small firms than for workers at large firms, the authors of the Rand study write.

The public's approval of the reforms has bounced back and forth, with 50 percent saying they liked the law in July, and only 43 percent saying the same thing in August. But if these latest reports prove anything, it's that snap judgments of the complex law are misleading at best, and those who hate it now may come to like it a lot.