Obamacare Is Really Expensive for Small Businesses. Surprise!

Lousy news for growing the economy, creating jobs, and overall increasing prosperity



"Complying with the health care law is costing small businesses thousands of dollars that they didn't have to spend before the new regulations went into effect," reports AP business writer Joyce M. Rosenberg. This should be a surprise to exactly nobody. In general, government mandates have poor track record of making people's lives less expensive and complicated. Specifically, businesses around the country have reported over the past year that Obamacare raised their healthcare costs and they anticipated more hikes to come. Hiring—especially of full-time employees—has taken a hit as a result.

Writes Rosenberg:

The Affordable Care Act, which as of next Jan. 1 applies to all companies with 50 or more workers, requires owners to track staffers' hours, absences and how much they spend on health insurance. Many small businesses don't have the human resources departments or computer systems that large companies have, making it harder to handle the paperwork. On average, complying with the law costs small businesses more than $15,000 a year, according to a survey released a year ago by the National Small Business Association.

Last summer, Federal Reserve Banks around the country surveyed businesses in their regions. In the service sector, about 82 percent of businesses told the Federal Reserve Bank of Dallas that the Affordable Care Act raised costs for them in 2014; 91 percent expected increased costs in 2015.

Federal Reserve Bank of Dallas

The manufacturing sector told a similar story of rising costs with more anticipated to the Dallas Fed.

The New York Federal Reserve Bank received similar reports from businesses of increased health costs from the Affordable Care Act, again with predictions of more of the same in 2015.

Businesses told the Federal Reserve Bank of Philadelphia they planned to raise prices, hire fewer workers, and use more part-timers because of the increased costs associated with the health law—unhappy news reported by the other surveys, too.

Looking only at small businesses, one-third of respondents to a National Small Business Association survey said they were holding off on growth plans because of ACA costs. Smaller numbers planned more subcontracting and part-time hiring.

National Small Business Association

The National Federation of Independent Business's Research Director Holly Wade told the Senate Finance Committee last week that, in terms of Obamacare, "The problems that many predicted have arrived but most of the promises for small business owners remain unfulfilled. We found that 62 percent of small business owners are paying higher premiums while only eight percent say their costs have dropped."

Higher costs for small business because of the mandates and compliance burdens mentioned by Rosenberg were somewhat anticipated by the law's authors. They were intended to be offset by tax credits. But getting those tax credits involves, yes, more compliance costs.

"Qualifying for the credits is cumbersome and complicated," noted Wade. "The tax credit is temporary but the mandate is forever, so the financial advantage is very small over the long run. It's certainly not enough to offset the higher costs and the administrative headaches that the law imposes on small business owners."

Which isn't good news for growing the economy, creating jobs, and overall increasing prosperity.

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    Linky brokey please fix: https://reason.com/archives/201…..-positions


    1. Have you tried emailing webmaster@reason.com?

    2. Your butt seems REALLY hurt by this. Have you tried Preparation H??

      1. Preparation H doesn’t help when you get repeatedly penetrated by a 13-inch cock.

        1. Information I hope I shall never need – but thank you, just in case

        2. We still on for Thursday?

          1. No, no – Thursday was your mother’s appointment

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  2. Phhht! Right wing propaganda!

    Everyone knows that business owners are all rich people who are hoarding money because they hate poor people!

    1. What? People are hoarding money?

      Don’t worry! We’ll just make more!

      /Janet Yellen

      1. The Fed prints more money, the DOJ prints more people. Problem solved.

  3. If it weren’t for the wreckers, hoarders, and kulaks, it would WORK JUST FINE!!

    1. funny, comrade, but remember: in Soviet Russia JOKE MAKE YOU

  4. A bill written entirely by corporate lobbyists and their stooges on Congressional staffs ends up being bad for small business. Who could have seen that coming?

    1. Every non-proggie who warned of this very thing?

      1. Sure, but not apparently the “reality based community”.

  5. Pajama Boy: punchable face, or most punchable face?

    1. Like, srsly – I’m generally the non-violent type, but…that face.

      *picks up Louisville Slugger (Johnny Bench model – won it at a circus in my youth) leaning against the garage wall*

    2. Pajama Boy: punchable face, or most punchable face?

      Really I don’t know why you try to differentiate. Any punchable face is the most punchable face at the time…..the E.J. Dionne corollary.

      1. fish….FTW

    3. What I’m curious about is how many smug pretentious prog-tard douchenozzles took “pajama boy’s” advice and went home at the holidays to lecture their EVUL intolerant right wing teahadist relatives about how wonderful Obamacare is, and how many ended up in the ER after getting the beating that such behavior so richly deserves.

      And whether their Obamacare policies covered it.

      1. They were still on their evil, teathuglican parents’ insurance.

      2. And whether their Obamacare policies covered it.

        +$10,000 deductible

    4. His face is about 3/4 as punchable as Peter King’s.


  6. If you’re the government attempting to break business to the saddle, do you want to deal with a million mom-and-pop enterprises or just a handful of Walmarts? Big business knows how the game is played and can pony up the ante, everybody else is just a nuisance to be gotten rid of.

    1. + 20,000 pt DOW

    2. +1 dago named Benito

  7. Obamacare Is Spurring Startups and Creating Jobs

    More than 90 new health-care companies employing as many as 6,200 people have been created in the U.S. since Obamacare became law, a level of entrepreneurial activity that participants say may be unprecedented for the industry.

    The health law, which took full effect in 2014, represents the most dramatic change to the U.S. health system in 50 years. Entrepreneurs, including some from within President Barack Obama’s administration, have founded companies that target employers, health insurers, hospitals, doctors and consumers looking to navigate new requirements and possibilities.

    It created a handful of jobs to mine through all the bullshit. What a great law!

    1. That which is seen…

      (and even that this “seen” part is just unproductive paper shuffling)

      1. There were in China two large towns, called Tchin and Tchan. A magnificent canal united them. The emperor thought fit to order enormous blocks of stone to be thrown into it for the purpose of rendering it useless.

        On seeing this, Kouang, his first mandarin, said to him, “Son of Heaven! This is a mistake.”

        To which the emperor replied, “Kouang, you talk nonsense.”

        I give you only the substance of their conversation.

        At the end of three months the celestial emperor sent again for the mandarin, and said to him, “Kouang, behold!”

        And Kouang opened his eyes, and looked.

        And he saw at some distance from the canal a multitude of men at work. Some were excavating, others were filling up hollows, leveling and paving. And the mandarin, who was very cultivated, said to himself, They are making a highway.

        When another three months had elapsed, the emperor again sent for Kouang and said to him, “Look!”

        And Kouang looked.

        And he saw the road completed, and from one end of it to the other he saw here and there inns for travelers erected. Crowds of pedestrians, carts, litters, came and went, and innumerable Chinese, overcome with fatigue, carried back and forth heavy burdens from Tchin to Tchan, and from Tchan to Tchin. And Kouang said to himself, It is the destruction of the canal that gives employment to these poor people. But the idea never struck him that their labor was simply diverted from other employments.

        1. Three months more passed, and the emperor said to Kouang, “Look!”

          And Kouang looked. And he saw that the hostelries were full of travelers, and that to supply their wants there were grouped around them butchers’ and bakers’ stalls, shops for the sale of edible bird nests. He also saw that, the artisans having need of clothing, there had settled among them tailors, shoemakers, and those who sold parasols and fans; and as they could not sleep in the open air, even in the Celestial Empire, there were also masons, carpenters, and slaters. Then there were officers of police, judges, fakirs; in a word, a town with its suburbs had risen round each hostelry.

          And the emperor asked Kouang what he thought of all this.

          And Kouang said that he never could have imagined that the destruction of a canal could have provided employment for so many people; for the thought never struck him that this was not employment created but labor diverted from other employments, and that men would have eaten and drunk in passing along the canal as well as in passing along the highroad.

          Bastiat’s “A Chinese Story.” I prefer busting that one out when this idiocy is peddled.

          1. And the progs would say “so, what is the problem here?”

    2. They just can’t understand that “having a job” is not the same thing as “being productive”. Forcing companies to hire people to figure out the law is not creating jobs. It is creating compliance costs.

      Hell, by this logic, why not just require every corporation in America to keep their records by hand written script? Think of all the scribe jobs that would create?

      1. Thank you. This line of logic cannot be offered up too often.

        1. I read an article on 3D house printing recently. Everyone in the comments was shitting their pants over the possible loss of construction jobs.

          If we banned power tools…

          1. That is weapons grade stupid.

            1. Awhile back I heard a caller to the local conservative AM station argue that his department of the state government on net brings in more money than it spends. He worked for tax & revenue. He was thereafter roundly shouted down by the hosts.

          2. That’s been in development for a while, and we I first heard about it, I thought it sounded awesome.

            I thought they wanted “affordable housing?”

          3. Power tools?

            Give everyone spoons.

          4. Everyone in the comments was shitting their pants over the possible loss of construction jobs.

            There are a lot of people who seem to believe that we are born into our careers, like a sort of caste. That construction workers, for example, are literally incapable of doing anything else.

          5. Someone still has to put the parts together. Most people aren’t going to build their own house no matter what.

            There are already factory made houses that are assembled on site, from modules, or pre-made wall panels. I think we are still far enough away from being able to pull up to your building lot with a laptop and a printer and pooping out a house that the construction industry is not in too much danger.

      2. It’s true, handwriting is in an awful state of decline.

      3. What Libertarian said.

        why not just require every corporation in America to keep their records by hand written script?

        And require these records to be transferred by human messengers. By *golly*, LET’S MOVE!!

      4. Didn’t Dear Leader make some sort of comment about how damaging ATM machines were because banks hired fewer tellers?

    3. 6,200 jobs constitutes “spurring job growth?” Seriously?

    4. “Look, I know it’s complicated. Dealing with a complicated problem requires an even more complicated solution. What YOU need is someone to help you navigate these treacherous waters. Who better to do so than ME, who was involved in creating said metaphorical waters? Now, about that $50,000 a month retainer…”

  8. Government control of health care and a simultaneous negative impact on capitalism? It’s a win-win to the modern Democratic Party.


    1. I thought he was doing the kneeling?

      1. Erm…..


        1. SUPER! Thanks for asking commanding!

          1. You misspelled “thooper.”

  10. Happy Birthday, Obamacare! You’ve gotten so expensive, so fast! *blows party blower*

  11. Foreseeable consequences are not unintended.

    Thank you. That is all.

    1. Calling Tulpa. We need you on aisle three to froth at the mouth and belligerently refuse to understand RC’s point.

    1. Which anagrams to nubile replicas, which reveals much.

  12. Higher costs for small business because of the mandates and compliance burdens mentioned by Rosenberg were somewhat anticipated by the law’s authors. They were intended to be offset by tax credits. But getting those tax credits involves, yes, more compliance costs.

    We need a tax credit for the tax credit.

    That’ll fix it, right?

    1. No. Let the rich pay their fair share! Well, maybe slightly more than fair. But they’re rich and must be punished.

      1. We all know that the rich aren’t paying their fair share! I mean, they’re rich! How can they both be rich and have paid their fair share?

        1. It’s easy enough to check. Do they have any money left?

        2. Why it’s common knowledge they take their surplus profits and deposit them in a giant, Scrooge McDuck-like vault of gold coins that they swim in!

          1. Look, Grand Moff, nothing exfoliates plebeian particulate matter from the skin quite like gold doubloons.

  13. Some things never get old for me. Anything ever uttered by Phil Hartman is funny. When the horses whinny after “Frau Blucher” is funny. And……… Pajama boy is funny.

    1. Every line in “Monty Python and the Holy Grail” still makes me laugh out loud after forty years and about ten thousand viewings…

      1. “Good idea, oh Lord.”

        1. “Oh, don’t grovel! One thing I can’t stand, it’s people groveling.”

            “Averting my eyes, Lord.”
            “STOP IT!”

            1. *removes Hly Hand Grenade of Antioch from its box*

              “How does it…..how does it….work?”

              “Brother Maynard – consult the Book of Armaments!”

      2. “Well I can’t just call you man.”
        “You could call me Dennis.”
        “I didn’t know you were called Dennis.”
        “Well you didn’t bother to ask, did you?”

        1. I’m 37! I’m not old!

    2. And……… Pajama boy is funny.

      I think the fact that OFA posted him clad in a onesie looking like a douchebag to advocate young people propagandizing to their families during the holidays (exactly the kind of anti-social thing douchebags do) was absolutely hilarious.

      The Obama camp and his progressive defenders keep disappearing farther up their own assholes to the point that they parody themselves, Pajama Boy being one classic exhibit.

      1. I spent months thinking he was a parody.

        1. That was my initial response when I the picture. Couldn’t believe it was intentional.

        2. How could he not be? I swear to God the OFA is some kind of Karl Rove deep cover mole operation.

      2. Anyone with half a brain would have realized that Pajama boy was actually a *success*, and that its universal mockery was a sign that it should be re-used in a more self-aware manner to promote the ACA

        a series of ads where Pajama boy, say, oversees a construction site? Drives a wheat-combine-thresher? Goes skeet-shooting? is setting up base-camp for final ascent of K2? has a drinking contest with Randy Savage? basically, goes 10,00% more-motherfucking-manly than you? would have been priceless. But they fucking blew it through their utter cowardice and embarrassment that they’d outed themselves as being shameless panderers to beta-millenials.

        Its one thing to fail to exploit success, but failing to exploit failure is just atrocious. Government is so incompetent they can’t even sell things that are fucking mandated.

        1. Problem is, is that Pajama boy is a real person who worked for them not an actor. They can’t show him doing all that non-stereotypical stuff because he doesn’t do that sort of thing.

          1. “Pajama boy is a real person who worked for them not an actor.”

            posh! Anyone can be an ‘actor’. If Matt Damon can do it, anyone can do it.

          2. “is that Pajama boy is a real person”

            That just can’t be true.

        2. Ok, macho-man is dead, but still, they could find some suitable replacement. Pajama Boy walks into a bar with Steven Segal. you get the idea.

      3. I had a Proggie friend on Facebook make a post over the weekend demanding the formation of a new Progressive Party with Liz Warren and Al Gore as their Presidential and Vice Presidential candidates.

        He actually things that such a party would stand a chance in national politics.

        I mean this is almost as funny as my Christian Taliban brother blaming every ill in the world on libertarians because we just won’t agree with him and support SoCon candidates.

        Both the Proggies and the SoCons seem to live in this perpetual dreamworld where the majority of people really do agree with them and it is just an evil conspiracy that is keeping the will of the people from being expressed.

        1. “Proggies and the SoCons seem to live in this perpetual dreamworld where the majority of people really do agree with them”

          This is true..

          The belief that they represent a “silent majority” (don’t laugh) as opposed to a ‘hysterically vocal minority’ is almost a requirement for the ability to being included in the club. Its a huge component of the self-image of social-conservatives and progs that they represent the “norm”, and that others are the wild, sadly-deluded deviants.

          Libertarians are notably distinct* for being suspicious that we are anything *but* a small number of cranky and over-informed misanthropes…. and that the repeated polls showing a ‘libertarian majority’ are nothing but foolish misrepresentations of badly-constructed questionnaires.

          That said = i fully encourage both groups to champion their ideologically-purist candidates. anything that splits the fringe away rather than integrates them is good in my eyes. see= Cruz today. If anything, he’ll help demonstrate the declining influence of the Religious Right in America, which will maybe help pull the GOP closer to someone like Rand (hope)

          (* reason #29829134 BCE is full of shit)

        2. Ooh, they should do that (Gore and Warren). I would love to see one (or preferably both) parties fall apart in my lifetime. It’s been way to long since the party system got shaken up.

  14. I for one, appreciate that my life has gotten more complicated AND more expensive if it means someone else gets cheaper health insurance. I don’t resent this law at all and hope that it continues forever, or at least until some brave Democrat pushes for full on socialized medicine.

    1. Well, as you can see above, Obamacare has reduced costs for 0.6% of small businesses responding to the poll. Ergo, some people are receiving cheaper health insurance. THE SYSTEM WORKS!


  15. the only joy I get from this law is thinking about the medical innovation that would have happened in the millenials lifetimes that won’t. I can’t think of anything fairer than that. thankfully my forebears didn’t decide to gobble all the seedcorn 50 years ago so I still get to benefit from the innovations that took place in my lifetime.

    1. Well, aren’t you a mean, nasty, old fart. Why is this the fault of “millennials”? It’s aging Boomers that made this happen.


    Look! There’s a number in there somewhere that is *less than 50%*? 48% are NOT restructuring!

    Shouldn’t you be myopically fixating on this point rather than moaning and groaning about all the other data which is comprehensively negative? Shouldn’t there be one voice suggesting that the benefits of this law are ‘market driven’ and that libertarians should love markets? Your failure to represent a diversity of opinions on this obviously more-complex-than-you-allow-for subject reflects what I believe to be your insidious Right Wing-leaning nature. Which is probably why you allow people here to sometimes say bad things about abortion or mexicans. Which is settled science.

    /smartest person ever

    1. Which is probably why you allow people here to sometimes say bad things about abortion or mexicans. Which is settled science

      Uhhh, what?

      1. Another post where most of the comments disagree with Reason and the long held LP position. The adverse possession movement by conservatives here continues.

  17. But 8% of small businesses are just fine with this.

  18. Look, It says affordable care act, not to whom the care would be affordable or accessible. What we really need is an “Affordable to Poor People Who Have to Work for a Living and Don’t Have Time to Fill Out Paperwork Act”

    1. Maybe “affordable” modifies “act”. But that doesn’t work well either.

  19. government should only mandate equality and freedom of choice. so much for letting the so called free market sort it out. just another Ponzi scheme like mandatory auto insurance. im sure that’s what customers wanted.

  20. If you can’t afford the increased costs then your business was shitty to begin with thus making you a crappy businessperson. This is win-win because Obama the Enlightener determined people’s health insurance were bad to begin with because.

    1. Rufus J. Firefly|3.23.15 @ 2:01PM|#
      “If you can’t afford the increased costs then your business was shitty to begin with thus making you a crappy businessperson.”

      And if this doesn’t make you a crappy businessguy, just wait’ll we raise the M/W to, oh, $40/hour.
      Now, you right-wing whiner, how good a business guy are you, hunh?

    2. +1 Hillary’s “undercapitalized” business

      1. I was thiking about that same quote when I began this article.
        IIRC it went something like this…

        ” it’s not my fault these businesses are undercapitalized” when told her healthcare miracle was going to run a certain number of small businesses out of business due to it’s cost increases.

        /Hillary Clinton in the 90s

    3. these are merely growing pains – everyone agrees “more people insured” is “better”. All this quibbling about how much it “costs” is silly. Also, your bosses have been cheating you out of better benefits for decades. because capitalism is a failure. Duh? naomi klein explained this ages ago.

      1. Therein lies the evil magic of their rhetoric. Of course ‘businesses will adapt’. Businesses in Europe have adapted to the socialist and excessive regulatory structure imposed on them for decades and persist. That’s human nature. We move forward.

        It’s just that we’re all we can be. Our advancement is lethargic as it is over burdened by parasitical organisms that chew away at it.

        1. It’s just that we’re not all we can be.

          1. Another variant of the loonie lefty logic I’ve been privileged to hear is the notion that ‘it’s okay a business fails because of high taxes or some other interventionist policy that kills it because others will move in and take its place. Duh’.

            Never once thinking about the damage does in the first place to existing businesses. They don’t realize a business is run by PEOPLE. You know, humans with families and such. The family that gets straddled with the debt they carried to start or maintain their business doesn’t go away. They don’t have any one fighting for them ‘to forgive their debt.’

            All they see is ‘private enterprise. Must be controlled’.

      2. I marvel at those who claim that an average working income level person with a policy with an 8K deductible whose insurance only cover 70 or 80 percent after that actually has health insurance.

        1. Is your point that the ACA is worse because it forces people to buy exactly these kinds of policies…?

          ….or that it was worse *beforehand*, when people were actually free to choose how much and what kind of coverage they did or didn’t have, and could actually find deductibles that were far more reasonable than they are currently?

          1. The first.

            Before the ACA I had Blue Cross for 230 that went to 340 after I married.

            It had a 3k total out of pocket and then paid 100%.

            Now they demand 900 a month 12k deductable for both and pays 80%.

            I didn’t sign up. There are alternatives.

            Also FYI did everyone know that if you present a disconnect notice from your electric company that’s considered a “lefe event” and saves you being fined under the mandate ?

            A disconnect notice is easy to manufacture.

            1. life event

  21. Wisconsin = Racism is Legal Now

    Further proof that Scott Walker’s lack of college degree means he will foist The New Dark Ages upon America

  22. Obamacare Is Really Expensive for Small Businesses. Surprise!

    Your LYING…. Small Business with less than 50 people (The majority of small businesses in America) are exempt from the ACA.

    As I’ve mentioned earlier, one should be able to open up any type of business, big or small, and the Job Creator should not have to pay ANYTHING other than wages and withhold taxes…PERIOD.

    No medical, no dental, no pension (These should be either private policies and BIG ticket items should be covered by the ALL in Taxes).

    Insurance Companies get to pay for the occasional bad roof and fire. But when Large Natural Disaster Strikes, they get a pass from the government. I want the same thing for the little guy.

    1. 51-100 employees can still be considered small to medium business.

      All these exemptions based on arbitrary cut offs are not helpful since not all businesses absorb costs the same.

      A company, for example, with 88 employees can still determine it’s too expensive.

    2. “Your LYING…. Small Business with less than 50 people”

      You’re ignorant.

      The Small Business Administration defines what small businesses are per industry and generally they are Businesses with less than 500 people or annual receipts of less than $750,000.


      1. JWatts|3.23.15 @ 4:44PM|#
        “You’re ignorant.”

        It’s Alice; “ignorant” is too kind.

    3. A lot of family owned restaurants employ more than 50 people.

      I’ve seen little landscaping companies with more than 50 employees.

      What they’re doing to survive is simply telling their employees that they have to cut their hours to less than 30 per week.

      1. In San Francisco, you’d be amazed at the number of small businesses that employ, oh, 44, maybe 48. But not 50; oh, no!

    4. What Alice meant to say:

      “Your (sic) LYING…. Small Business with less than 50 people (The majority of small businesses in America) are exempt from the ACA. BECAUSE INTENCHONNNSSS!!!!”

  23. Looks to me like the MSM has ignored that Obamacare sites have sent incorrect tax forms (making people wait to file taxes) and made mistakes in handing out subsidies. That means people have to wait to file taxes or even pay back the subsidies they received.

    My family signed up for expanded medicaid, so I should be jumping for joy, but….. so far, I don’t see how it’s much better than Healthway LA. My mother needs treatment for her foot and she is being bounced from one specialist to another to get this approval and that. 7 months of waiting and still counting. 9 AM appointment means you’ll see the doctor around 11 AM.

    I’m already hearing about some people just paying out of pocket to get treatments they need. Free is free, but 2.2 million get it free, you have to wait.

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  26. I don’t like the fundamental philosophy of the ACA as well as many other tenets to numerous to mention. I want to control my health care needs, not the government. The government miss manages everything. This is one more albatross in the making. Social Security, Medicare and Medicaid are perfect examples. Another bureaucracy is all I see.
    This is anything but affordable, it’s accessible, not AFFORDABLE! We were told many lies about this program. I don’t like liars. Let’s hope SCOTUS gets it right this time. I have my doubts.

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