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New Research Shows Obamacare is Crucial to California’s Small Businesses

This post from Small Business Majority’s California Director, Mark Herbert, originally appeared on Medium.com.

Opponents of the Affordable Care Act (ACA) have spent years pleading their case against the healthcare law, making claims that it is bad for small businesses because it supposedly stifled job growth and increased costs for small firms. A new report, however, proves such arguments are flat-out wrong through hard data showing the ACA is critical to the success of California’s small businesses.

A data brief released recently by UC Berkeley’s Center for Labor Research and Education shows just how much the ACA has helped many California small businesses, self-employed entrepreneurs and small business employees gain access                                       to health coverage.

According to the report, before the ACA small businesses and their employees represented a disproportionate share of uninsured workers: 33.8 percent of self-employed Californians and 31 percent of California’s small business employees were uninsured in 2013. By 2015, however, those numbers had fallen to 17.9 percent and 18.8 percent respectively, thanks to the ACA. That amounts to 567,000 self-employed workers and more than 1 million small business employees who benefitted from the ACA’s insurance options in 2015 alone.

The gains made by small businesses under the ACA are particularly significant when compared to their larger businesses counterparts. In fact, 20 percent of those working for California firms with 50 or fewer employees received health coverage thanks to Medi-Cal expansion or subsidized plans through Covered California, compared to 11.4 percent of workers at large corporations.

These coverage gains under the ACA are only part of the story for small firms. The ACA has also eliminated “job lock,” allowing workers who previously felt tied to their job by their benefits package to pursue their dreams of starting a business of their own or joining a thriving small business.

While there is certainly a lot of data available to demonstrate how important the ACA is to small businesses, the case against repealing the healthcare law is also made by individual entrepreneurs who will be hurt without it. Small Business Majority has listened to the personal stories of many business owners around the country and here in California, and it’s remarkable how many tell us they will lose their businesses without the ACA because they have a pre-existing condition and may not be able to afford coverage, or they won’t be able to offer health insurance to their employees without ACA-provided tax credits or expansion to Medi-Cal.

Although certain provisions of the ACA can and should be improved, we believe repealing the ACA would eradicate these hard-won benefits for America’s entrepreneurs, cause a rapid rise in healthcare costs and create tremendous economic instability.

That is why we believe the American Health Care Act (AHCA), the Republican replacement plan for the ACA, would be a major step backward for small businesses. Small business owners are well aware of the AHCA’s flaws, which is why Small Business Majority’s scientific opinion polling found that small firms prefer the ACA to the AHCA by a ratio of 2:1.

We absolutely cannot return to the old way of doing business, especially in light of this new report that proves how valuable the ACA has been to California’s small firms. Instead, we must make it even easier for small business owners, their employees and the self-employed to gain the coverage that is necessary for their success and prosperity. This means upholding the ACA and strengthening the law, rather than repealing it.