Obamacare Continues to Crush Small Business Owners in 2018
By Whitney Jones, Graduate Fellow, Health Policy, Institute for Family, Community, and Opportunity at The Heritage Foundation.
Lawmakers may have gotten rid of the individual mandate, but the crushing weight of Obamacare still has not been lifted.
Thanks to Obamacare, in 2018, some Virginia small business owners and their employees reportedly will only have one option for a health insurance plan that offers health savings accounts. As a result, those who prefer the health savings account will have to pay higher premiums and give up their doctor.
Health savings accounts allow individuals and families to pay for medical expenses with tax-deductible dollars, the funds you pay into your account can cover a wide variety of health care costs.
They can be used to pay out-of-pocket costs for doctors, for instance, as well as medical tests and procedures, vision and dental bills, prescription copays, medical supplies, and countless other medical expenses.
Yet this popular form of insurance is now becoming less and less available under Obamacare.
Small business owners and their employees who rely on the broken individual market for health insurance continue to lose access and control over their health care dollars. Each year, their health care costs go up dramatically while their access to care declines.
I spoke with one small business owner in Virginia who told me that in order to maintain coverage with a health savings account in 2018, he had to switch to the only option available to him in the Obamacare marketplace—a Kaiser Health plan—and give up access to his current physician.
This year, his premium will rise to $425 per month.
Think about that: The switch will cost him more each month, he will lose access to his doctor, and he will not be able to save tax-free for out-of-pocket expenses he will incur for medical care.
When he started his company in late 2010, he purchased an HMO plan with Golden Rule UnitedHealth that cost him less than $140 per month. He chose this plan because it offered him similar coverage to the employer plan he had prior to starting his own business.
He was able to keep his relatively inexpensive plan until 2014, when Obamacare’s heavy regulations went into effect.
This is the fifth time he has had to change plans since Obamacare was implemented in 2014. Each year, he has received a letter telling him his health plan will not carry over the next year. He has been forced to shop for a new plan every 12 months, only to find out he’ll have to pay more to have a plan with a health savings account.
For the past three years, he has maxed out his health savings account. In other words, in addition to paying high monthly premiums (which require a high deductible to be met before payment of medical bills), he has also expended the savings account he personally funded to pay for health care costs not paid for by his health insurance plan.
This year, the maximum health savings account contribution limit set by the IRS is $3,450 for individuals. All additional health care expenses (i.e. copays and coinsurance) will come out of pocket, meaning individuals who want to take advantage of the tax savings of a health savings account will be further limited in their ability to do so.
The original purpose of a health savings account was to offer individuals control and flexibility to assist in managing their annual out-of-pocket health care costs.
Low monthly premiums and reasonable annual deductibles meant a health savings account was an ideal benefit available to anyone who wanted to participate in setting aside personal funds to assist in paying for their health care.
That was pre-Obamacare.
For many, contributing to a health savings account is no longer financially feasible. And it may not even be an available option to many who want one.
Once again, Obamacare has proven it is not affordable and greatly limits consumer choice in the marketplace.
Congress took an important first step late last year when it eliminated the individual mandate. However, because Obamacare continues to be the law of the land, millions of individuals are still in need of relief from the high monthly premiums annual deductibles they are strapped with.
Congress should pursue health care reform that gives individuals direct control over their health care coverage. Expanding health savings account options in the marketplace is a consumer-centered solution that would do just that.
*To read this commentary on The Daily Signal, click here.