With the passing and implementing of the Patient Protection and Affordable Care Act in 2010, there are going to be a lot of changes to the healthcare system that will affect everyone with any connection to the medical field. The bill was well over 2,000 pages long, not including the more than 20,000 pages of regulations created. With an understanding of economics, an amount of regulations that large is bound to create problems for health care providers and businesses alike. What is important to know is that there are effects that come from this bill that will trickle down to you and me. In this section, I will give some perspective on the effects that this bill will create. In this part, let’s look at the business aspect of this legislation.
There is no question that the health care system in the United States has needed repair for a long time, but this bill that is just starting to go into effect is already strangling many businesses to the breaking point. One of the provisions in the bill is that any business with 50 or more full time employees must provide full health insurance. As of now, many small businesses are struggling to stay afloat in the midst of a rough economy, but will adding to the costs of these businesses really help the economy? Many of these small businesses have had to cut back on hours, making workers part time, or laying off workers to ensure they were below the 50 employee threshold. Businesses now have no incentive to expand and hire more people, as any newly gained profits are most likely going to be offset, if not surpassed by the requirements from the health care law.
With this in mind, people can start seeing the hypocrisy of the Obama administration’s claims that it is making hiring easier and helping businesses expand. If that was true Mr. President, then why are so many businesses closing and/or downsizing? For instance, Papa John’s pizzeria had announced that because of the new health care law, it would be raising prices and cutting employee hours. This was a relatively large franchise, but it still was proclaiming that the costs of the health care law would affect its operation.
If a large corporation like Papa John’s said that it would be affected by this bill, how much more would small businesses be affected? Knowing that for the most part the American economy has been fueled by entrepreneurs who took risks and created their own business, implementing a law that will severely strangle capital out of the small business section of the economy is quite frankly the opposite direction that health care reform needs to go. Remember that businesses are the ones who provide jobs to the people.
Coming next week: part two of how the Affordable Care Act will affect you in personal finance!