Obama Health Care

The Obama health care debate has been ongoing for months, but now that the bill has been passed, how will it affect American small businesses?  The ever-increasing cost of health care have affected both America’s economy and our businesses.  In fact, the majority of citizens who are forced to file bankruptcy do so because medical costs have taken their toll on finances.  Hopefully, over the next several years we will experience the positive benefits of the Obama health care plan.

As far as businesses go, employers and employees alike will benefit according to some.  Gary Locke, Secretary of Commerce, states that overall the bill will lower premiums and increase competitiveness between businesses in the United States.  According to Locke, this new plan will lower premiums for employer-sponsored insurance by up to three percent, which at even 1 1/2% works out to be approximately $10 billion each year in savings for both large firms and their employees.

A few of the substantial benefits provided in the Obama health care package for employers and employees include:

*  Reducing hidden taxes by about $1,000 per person.  Many who have no insurance visit emergency rooms to get medical attention, which costs those who do have medical insurance.  In fact, those with insurance pay on average $1,000 to cover the costs of these uninsured individuals.

*  $40 billion in new tax credits for small businesses – The Obama health care bill includes these credits so that small businesses can afford to provide health coverage for their employees.  Approximately 4 million small businesses will be eligible for these new tax credits, according to the council of economic advisers.  This will supposedly increase the competition of small firms in America, while reducing the cost of coverage for small business owners.

It is important to remember that many of the provisions of the Obama health care plan will not go into effect until 2014, and rules could possibly be changed by amendments that will be considered by the Senate.

Small businesses, which are defined as those with 100 employees or less, must set up Small Business Health Options Programs by 2014, which means owners of small businesses will have the opportunity to pool together with other small businesses to buy insurance.  Some states may determine that only companies with 50 or fewer employees will be eligible to pool with other companies, but as small businesses grow beyond the size limits they will be grandfathered in.

For the time being, businesses will be eligible for a tax credit of 35% of health insurance costs if they fall in to this category:

10 or less employees working equivalent to full time, with average earnings of under $25,000 per year.  Those businesses with 11 to 25 employees earning and average of $50,000 will be eligible for partial credits.  These stipulations will be in effect until 2014, or until the SHOP exchanges or Small Business Health Options Programs take effect.

It’s easy to see why Obama health care has so many individuals and business owners in an uproar.  Everyone has their own opinion; some believe the changes will be beneficial, others think things will only get worse.  Looks as though we may just all have to wait and see how things play out to know for a fact whether Obama health care will better our lives.

As many have seen reported on the news and in other media recently, threats are being launched against some members of Congress.  While the Obama health care plan will certainly go down in history, it’s still a question in many peoples minds of just how effective it will be, and whether individuals lives are improved.

Mark South
Obama Health Care