The costs of Obamacare are staggering and will be devastating to small businesses in America. The initial estimates have risen from zero to 2.7 trillion dollars over the last two years. This quote is from the non-partisan Congressional Budget Office. I believe the actual costs will be much higher by the time Obamacare is implemented.
There are many small hidden costs, but they are not the real causes of the devastation that will occur. The hidden costs include the $68 cost per person that is being charged to every insurance company to cover the uninsured portion of Obamacare. This is set now as a three year cost and is being passed on to most insurance policies, thus being paid by all workers.
There is a new 3.8% tax on all home sales on all profits above $250,000. This will hit the older population especially hard; those that have stayed in their homes for ten, twenty and 30 years and were counting on that equity build-up for retirement. There is a 0.9% new tax on all unearned income and capital gains over $250,000. Again, this tax will likely hit that older population the hardest. These are the people that bought stocks when younger and held on to them, or built up a sizeable dividend income over the years. There are also new taxes on medical devices (3 billion dollars) that will be passed onto insurers and patients. But as I said, these hidden costs (taxes) are just the tip of the iceberg.
One of the real problems is how Obamacare will affect small businesses and our entire healthcare system. Starting in 2014, small businesses with over 50 full time employees will have to pay a penalty if they do not pay for employee insurance at the percentages mandated by the government. They are not allowed to adjust wages to compensate for this – so employers three choices are: reduced profits, pay the penalty and drop current insurance coverage, or lower the number of full time employees to below 50.
Several recent studies show that over 57% of small businesses will drop their insurance coverage and pay the $2,000 per employee penalty. This will save the small business money but will hurt employees, while shifting additional cost to taxpayers. Employees will be forced to go into the federal or state insurance exchanges (only 15 states have opted in to the mandated exchanges so far, so the other 35 will be federal exchanges). Although this insurance will be partially subsidized from the penalties employers pay, the cost will still be much higher than the share employees were paying with their employer-based insurance. The result will be higher costs to employees, and additional expense for the federal government.
There is also a “hidden cost” on small businesses. Small businesses (which currently provides 80% of all employment in the country) may become a less attractive place to work relative to large corporations.
Another 24% of small businesses will reduce their number of full time employees to below 50, to avoid the Obamacare mandates. This will be done by switching employees to part time, splitting companies up into smaller entities, or just firing employees or not hiring. This is especially true in the health club, restaurant, and small retail industries. The overall result is lower employment, higher insurance costs to employees, and less efficiency and profit in small business, which will suppress employment even further. Not to mention the additional strain on the federal budget.
The effect on our healthcare system will be even more harmful than the devastation to our small businesses. President Obama has taken 716 billion dollars out of Medicare to help pay for Obamacare. These funds are taken from the fees hospitals and doctors receive. Recent studies (K.A. Med Data) show that approximately 1/3 of hospitals and doctors will stop accepting Medicare. This puts a huge burden on the remaining 2/3 of the hospitals and doctors that will still accept Medicare, resulting in longer waits (a form of rationing), shorter visits with doctors, and lower quality healthcare. Now add the thirty million uninsured patients that will mostly go through Medicare and the system will be so overburdened, that the quality of care will be extremely poor.
This devastation to our healthcare system will cause another huge problem, the formation of a two tier healthcare system in the United States. Those with means, that do not want to wait weeks for an appointment, that do not want to wait for hours in a doctor’s office, that do not want to receive low quality care will go to a new breed of doctor’s that are growing rapidly, the Concierge Doctor. These doctors only accept about 600 patients in total. Each family pays about $5000 per year plus whatever their insurance will pay. For this you receive basically a private doctor. No waiting for an appointment, no waiting in the office, the ability to spend an hour or so with your doctor on each visit, the ability to call or email your doctor and get a reply from your doctor. This will be the high quality care that only money and time can buy. The masses will be using Obamacare and receiving low quality care and the other 5-10% that have the means will be receiving great care.
For those that either cannot afford or choose not to use the new Concierge Doctor’s and since Obamacare is now the law of the land, the only recourse businesses and employees have is to maintain their health. The best method of treating disease and sickness is to prevent them before they occur. This can be done by eating all natural foods, proper nutrition, drinking enough water, getting 7-8 hours of sleep per day, keeping our weight down, and exercise.
In fact, the Centers for Disease Control and Prevention (CDC) reported that you can lower your risk of contracting a major disease (cancer, heart disease, diabetes, arthritis, etc.) by 80% with these simple lifestyle changes. There are several good health and wellness programs that work towards preventing disease and maintaining good health. The one that I helped to develop is Green Box Foods, and the results have been excellent. More information can be found at www.GreenBoxFoods.com.
The only defense against Obamacare’s negative consequences is to stay healthy. The development of an employer or affinity-based health and wellness program is the most efficient and cost effective way to do so.
This is a preview to an article that will appear in California Broker’s Magazine.
Be sure and order your copy of Dr. Kantor’s highly praised new book What Matters: Leadership Values that Just Might Save America. Proceeds from sales benefit the American Diabetes Foundation, the All-Natural Food Council of North America, the Natural Products Association.