On March 23, President Obama may lift a glass to toast the first anniversary of his sweeping health care law, but his joy will not be shared by American small-business owners.
If there’s anything small business would like to celebrate about the Patient Protection and Affordable Care Act, it’s the possibility that it’s on a fast track to being declared unconstitutional by the U.S. Supreme Court. After a lawsuit by the National Federation of Independent Business and 26 states was successful in district court in having the law declared unconstitutional, the Department of Justice appealed, opening the door to a high court decision.
At the law’s core is the individual mandate forcing virtually all Americans to purchase government approved health insurance. This is the first time the government has demanded individuals buy a specific product or pay a penalty, simply because they are alive. This represents a gross overreach of power exercised by the federal government.
The Constitution does not give Congress the authority to force citizens into commercial activity. Although the White House is correct in asserting that the Commerce Clause allows Congress to regulate activities that substantially affect interstate commerce, they are dead wrong in trying to define the mandate as such an activity. The decision not to buy insurance is distinctly an “inactivity,” it’s a decision to do nothing. And up until now, the Supreme Court has never permitted Congress to regulate our personal decisions to not act or not participate in commerce. Such a mandate would give the federal government unlimited power over business affairs and citizen’s lives. And stopping this precedent from being established is exactly why NFIB joined the lawsuit with the majority of states.
As the constitutional challenges make their way through the judicial system, the president’s health law is already reaching deeply into the pockets of Main Street entrepreneurs who are struggling in a fragile economy. With the law not yet fully implemented, medical premiums are skyrocketing and many small employers are being informed by their insurance providers that the plans they have now are being canceled.
Premium increases of 20 percent or more are not uncommon as health insurers accelerate hikes in anticipation of the implementation of many new insurance market rules and pending taxes. Many existing plans are being found unlikely to meet the law’s expected minimum benefit standards, so they’re being cancelled even before all the regulations governing the Act are finalized. This is leaving small employers with even fewer options for health insurance than they had prior to the law being enacted. Not exactly the reform small businesses wanted.
For a group that has complained for more than 25 years about the steadily rising cost of health insurance, this is insult heaped on injury. They’ve been hit with annual double-digit increases, pushing the average small-group market premium to $4,260 for individuals and $11,000 for families. Small employers simply can’t sustain providing health insurance at these costs.
The public is grasping the price tag and consequences of the Act too. According to a recent Rasmussen poll, 62 percent of likely voters want the law repealed and 61 percent believe the law will cause insurance costs to increase. The more people learn about the law, the more they understand that this reform is not going to decrease health care costs at all.
And it’s not helping small businesses.
As we observe the Act’s first birthday there isn’t much for small business to celebrate. What they can hold on to is the hope that the U.S. Supreme Court will reach the same conclusion Main Street did a year ago: President Obama’s healthcare law is unconstitutional, bad for small business, and is dangerous for the nation’s economic future. It needs to be declared null and void, in its entirety, as soon as is practically possible.
Karen Harned is the Executive Director of the NFIB Small Business Legal Center, the leading advocacy organization for small business owners in our nation’s courts.
Karen R. Harned, esq. is executive director of the NFIB's Small Business Legal Center.