Benefits to Individuals and Small Business Under Obamacare

With legislation as vast as the Affordable Care Act there are bound to be winners and losers. This is worsened by the refusal of Congressional Republicans to participate responsibly in the legislative process, as under normal circumstances problems would be adjusted with legislation subsequent to initial passage. Instead House Republicans are planning yet another futile attempt to derail Obamacare.

Groups who benefit the most from Obamacare are those who in the past lost their insurance coverage when they became ill, those who purchase (or who are unable to afford) coverage in the individual market, and those who are unable to obtain coverage due to having pre-existing medical conditions. While many people receive coverage through employers, it has been much harder for those who must purchase their own coverage on the individual market to obtain affordable health insurance. There is good news out of New York for such people:

Individuals buying health insurance on their own will see their premiums tumble next year in New York State as changes under the federal health care law take effect, Gov. Andrew M. Cuomo announced on Wednesday.

State insurance regulators say they have approved rates for 2014 that are at least 50 percent lower on average than those currently available in New York. Beginning in October, individuals in New York City who now pay $1,000 a month or more for coverage will be able to shop for health insurance for as little as $308 monthly. With federal subsidies, the cost will be even lower.

Supporters of the new health care law, the Affordable Care Act, credited the drop in rates to the online purchasing exchanges the law created, which they say are spurring competition among insurers that are anticipating an influx of new customers. The law requires that an exchange be started in every state.

“Health insurance has suddenly become affordable in New York,” said Elisabeth Benjamin, vice president for health initiatives with the Community Service Society of New York. “It’s not bargain-basement prices, but we’re going from Bergdorf’s to Filene’s here.”

“The extraordinary decline in New York’s insurance rates for individual consumers demonstrates the profound promise of the Affordable Care Act,” she added.

Administration officials, long confronted by Republicans and other critics of President Obama’s signature law, were quick to add New York to the list of states that appear to be successfully carrying out the law and setting up exchanges.

“We’re seeing in New York what we’ve seen in other states like California and Oregon — that competition and transparency in the marketplaces are leading to affordable and new choices for families,” said Joanne Peters, a spokeswoman for the Department of Health and Human Services.

The trend is becoming clear. Those who live in states where the state government is working to make the Affordable Care Act work will benefit. Those who voted for Republican state governments will suffer due to the actions of those they elected. As New York has rates higher than typical in other states, those who live outside of New York probably will not see decreases in their premiums, but not of this magnitude.

Small businesses also benefit, even if not as much as individuals in New York: “The rates for small businesses, which are considerably lower than for individuals, will not fall as precipitously. But small businesses will be eligible for tax credits, and the exchanges will make it easier for them to select a plan. Roughly 15,000 plans are available today to small businesses, and choosing among them is particularly challenging.”

While Republicans are spreading scare stories about small business, the Affordable Care Act is actually beneficial for small businesses in two ways. By offering lower rates and tax credits, small businesses will no longer be at a severe disadvantage in hiring workers as when competing with larger employers who can more easily provide health care coverage. Secondly, by making insurance coverage portable, it will be easier for people to leave large companies to either start their own business or work or other small businesses.

 

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