Small Business CFOs Call Obamacare ‘Fastest-Growing Threat’

Justin Haskins Heartland Institute
Published February 24, 2016

Consumer Power Report #495

One week before the Republican Party’s so-called “SEC Primary Day,” on which 12 states and more than 500 delegates will be up for grabs, presidential candidates Sen. Marco Rubio (R-FL) and Sen. Ted Cruz (R-TX) frantically campaigned in Nevada, emphasizing the importance of ending Obamacare.

The Washington Post notes the focus on Obamacare, a program virtually all the Republican candidates have voiced strong opposition to throughout the campaign, marks a distinct shift in the way many of the remaining GOP primary contenders are attempting to sway voters. Rather than focusing on policies that are primarily of interest to the Republican conservative base, candidates are now campaigning on issues moderate party members, independents, entrepreneurs, and small business owners are most concerned with: fixing the economy and health care reform.

New surveys suggest the candidates may be making the right move. According to a poll conducted by LevelFunded Health, a company that offers small businesses “an alternative to traditional [health insurance] plans,” 64 percent of more than 1,500 chief financial officers (CFOs) surveyed say “small group health insurance premiums are now the fastest-growing threat to their company’s bottom line,” a change a majority of the CFOs claim is a result of policies imposed by Obamacare.

Sixty-nine percent of the respondents agreed the complexity of Obamacare regulations “as it pertains to their small group health insurance plans take their focus away from other financial areas of running the business.”

One reason businesses are spending so much time dealing with Obamacare regulations today is the 2015 tax year marks the first year many of the Affordable Care Act’s small business tax rules go into effect. The Associated Press (AP) reports new forms many small businesses must comply with are “labor-intensive” and costly:

“Starting this year, businesses required to comply with the health care law must complete forms that detail the cost of their coverage and the names and Social Security numbers of employees and their dependents,” reports AP. “The government will use the information to determine whether a company provided coverage that was affordable under the law, or whether it must pay a penalty.

“Accountants have described the forms as labor-intensive because they require information from a number of sources, including payroll and health insurance records,” AP reports. “Many companies have had to hire workers or payroll services to complete the forms.”

In response to numerous requests from small businesses struggling to keep up with Internal Revenue Service filing requirements, the agency has agreed to push back some of its deadlines for small businesses to the end of June.

It’s not only small businesses that are struggling under the Affordable Care Act. CNBC reports there were 12 percent fewer plans offered during the 2016 Obamacare open-enrollment period compared to 2015, and average Bronze Plan premiums for most Americans rose by 11 percent. This helps to explain why a poll released in January by CBS News and The New York Times found 52 percent of Americans say they oppose Obamacare, while only 41 percent of respondents support it.

ACA has greatly harmed small businesses and individual Americans alike. Although the specific aspects of Obamacare that created these problems differ from one another, the underlying cause is the same: centralized, bureaucratic control of an absolutely massive and complex market. ACA’s primary goal is to provide affordable health insurance for all Americans and to increase access to quality health care services, but imposing these goals on the health care industry has been an incredible failure. Costs continue to grow, prices are higher than they have ever been, and millions of Americans have been forced out of health insurance plans they enjoyed.

The only proven way to increase access to quality services – in any market – is to encourage innovation through the power of the free market. When individuals have the ability to make choices that work best for them and their families, the whole market benefits, and eventually competition brings costs down. Government reforms can help to encourage this process and improve access to quality care, but the Affordable Care Act does little to fix the nation’s health care crisis. In fact, at least in its earliest years, the program has only made many existing problems worse.

— Justin Haskins


IN THIS ISSUE:


BATTLE OVER MEDICAID EXPANSION ALTERNATIVE CONTINUES IN IDAHO

Idaho’s lone alternative to Medicaid expansion isn’t dead, but it may be on life support.

The estimated $30 million plan – pitched at the beginning of the [legislative] session by Gov. C.L. “Butch” Otter – would provide primary and preventative care to 78,000 Idahoans who make too much to qualify for Medicaid but also don’t qualify for health insurance subsidies.

However, finding consensus among the Legislature to not only sign off on the plan but also find the money for it has so far been futile.

One of the Legislature’s most conservative panels killed the first funding proposal earlier this week with the help of the Democratic members who would rather expand Medicaid eligibility to cover everyone who earns less than 138 percent of the federal poverty level. This would allow the federal government to pick up the tab, but Republican lawmakers have opposed such efforts.

Legislative leaders met with Otter’s office days after the funding bill failed in the House State Affairs committee, but they were unable to come to an agreement on if and how the Republican governor’s Medicaid alternative should be funded.

“At this time, we’re re-evaluating,” House Speaker Scott Bedke of Oakley said.

SOURCE: Associated Press


HEALTH CARE HACKERS HOLD COMPUTER SYSTEMS FOR RANSOM

After hackers used malware to commandeer computers at Presbyterian Medical Center on Feb. 5, the Hollywood hospital paid them over $17,000 in ransom to regain control over their systems. The cyber-ransom is the latest threat posed by hackers to healthcare providers already struggling to protect patient records from prying eyes.

The hackers’ ransomware encrypted files on hospital computers to halt access to them and prevented hospital workers from communicating with each other over their network. The hospital claims personal patient records and patient health weren’t compromised during the attack, but nonetheless, work probably ground to a snail’s pace as employees were forced back to the dark ages of pencil and paper.

Facing costs that can run into the tens of thousands of dollars (or more) to have cyber-security experts fix their systems, hospital administrators determined it would be cheaper and quicker to pay the ransom and obtain the hackers’ decryption key.

SOURCE: By Todd Campbell, The Motley Fool


CERTIFICATE OF NEED REFORM DIES IN FLORIDA SENATE

With hospitals, nursing homes and hospice providers lined up in opposition, a Senate panel Wednesday rejected a proposed overhaul of a key regulatory process for new health-care facilities.

The Senate Health and Human Services Appropriations Subcommittee voted 6–2 to kill a bill (SB 1144) that would have created exemptions to the “certificate of need” process. Under that controversial process, the state must review and give approval before new health-care facilities are built.

House Republican leaders have made a priority of trying to eliminate certificates of need for hospitals. But the Senate proposal, sponsored by Sen. Don Gaetz, R-Niceville, took a different approach – proposing exemptions instead of an outright elimination and also including nursing homes and hospice providers.

The defeat of Gaetz’s bill points to bipartisan opposition in the Senate to making major changes in the process and could signal the demise of the issue during this year’s legislative session. Moments after the vote, Gaetz said supporters of revamping certificates of need could try to add the issue to another health-care bill, though it was not clear how that might happen.

“I haven’t got a plan yet,” he said.

The vote also showed the lobbying clout of the hospital, nursing-home and hospice industries in Tallahassee, with groups such as the Florida Health Care Association and the Safety Net Hospital Alliance of Florida opposing the bill.

SOURCE: Palm Beach Post


NEW YORK GOV. CUOMO’S DRUG PLAN UNDER FIRE

Drug companies would be required to give the state government proprietary information about research, marketing and manufacturing costs under a proposal included in Gov. Andrew Cuomo’s budget.

The measure, aimed at reducing pharmacy costs in the state’s Medicaid program, could set a dangerous precedent for price controls, according to the state’s largest business lobbying group. And while it might help lower costs for government health care programs, it would raise costs for private insurers and employers, one Albany health insurance CEO said.

“It’s another cost shift,” CDPHP CEO Dr. John Bennett said of the governor’s plan. “That transparency has to be to the market, not just the governor’s office. My fear is that if the government beats up the pharmaceutical industry to get lower pricing, where do you think they’re going to make up the difference? … This isn’t helping the commercial payers.” …

Cuomo’s proposal would allow the Department of Health to identify critical drugs. The department could then require manufacturers to turn over information about the production costs, research costs, marketing activities, the price charged outside of the country, the profit margin on the drug and other information.

SOURCE: By Marie J. French, Albany Business Review