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Chairman Graves in the Washington Examiner: If they like their health care, can small businesses keep it?

Washington, Aug 17 -

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If They Like Their Health Care, Can Small Businesses Keep It?
By Chairman Sam Graves 
August 17, 2011

When President Obama signed the Patient Protection and Affordable Care Act, aka Obamacare, into law last year, he promised the legislation would increase access to and affordability of health care.

He touted Obamacare as a job creator and a way to reduce our deficit. He said it would help small-business owners afford coverage for their employees. And, despite the tidal wave of new mandates and regulations it would bring, he assured the American people that "if you like your health care plan, you can keep your health care plan."

Fast-forward 18 months, and health care premium costs are still astronomical and the law is having a negative effect on jobs. Obamacare's complexity has created more confusion than solutions, adding to the uncertainty that plagues today's businesses and families. It has also stymied investment and stalled economic growth that is necessary for job creation.

As chairman of the House Committee on Small Business, I am particularly concerned about Obamacare's effect on our small companies. Small businesses are our best job creators, and it is imperative that we provide an environment that allows them to thrive. Unfortunately, many of Obamacare's provisions do just the opposite.

Under the employer mandate provision, small businesses with work forces of an average of 50 or more full-time-equivalent workers will be required to provide affordable health care coverage that meets government standards.

For those businesses, a financial penalty will be assessed if one or more full-time workers receives subsidized insurance through the new health care exchanges, the government-run marketplace created by the PPACA. This penalty increases as the size of a work force increases, directly discouraging expansion and hindering job growth.

Further, under Obamacare, many small-business owners will face increased taxes, such as a 3.8 percent Medicare tax on net investment income. Over the past few years, many small-businesses owners have struggled to stay afloat, often forgoing their own salary to keep their doors open.

For some small businesses, new taxes like this Medicare tax will be another burden to add to the list.

Despite promises that health care plans in place on March 23, 2010, would be grandfathered or exempt from certain Obamacare provisions, regulations indicate many plans may lose their grandfathered status over the next several years.

In fact, Department of Health and Human Services officials have predicted that over half of all employers and nearly 80 percent of small firms may be driven out of their current health care plans and forced to switch to higher-priced plans or penalized for dropping insurance altogether.

Additionally, most small firms are not eligible for the complicated, temporary health care tax credit that the president and former Speaker Nancy Pelosi promised would help small businesses afford coverage.

Those that are eligible may only qualify for part of the available credit and it may do very little to offset their costs. Because the overall tax credit actually decreases for each employee beyond 10, most small businesses may refrain from hiring new employees in order to sustain their eligibility. All small businesses will be out of luck and forced to incur the full financial burden of health insurance when the tax credit expires after 6 years.

It is clear health care reform of some type is necessary. Indeed, reforming our system with common-sense principals that will lower costs and increase access is greatly needed.

We must do this without a government takeover of health care that creates huge bureaucracies we can't afford and job-killing mandates. With unemployment on the rise, we have to remove the mandates, taxes and regulations that are holding our job creators back.

Rep. Sam Graves, R-Mo., is chairman of the House Small Business Committee.

Read the op-ed online HERE