White House Refusal to Pay ACA Subsidies Would Devastate Small Businesses, Destabilize Health Marketplaces

The announcement by President Trump yesterday that the federal government would like to discontinue paying subsidies to insurance companies as part of the Affordable Care Act (ACA) would harm small businesses by destabilizing the health insurance market, causing premiums to skyrocket and leaving millions of entrepreneurs and small business employees unable to afford coverage.  

Under the healthcare law, insurance companies receive cost-sharing subsidies from the federal government in order to lower the deductibles and co-pays of low and moderate-income enrollees. Although the federal government may be required by law to pay these subsidies, President Trump would like to stop issuing them as part of a politically motivated quest to destroy the ACA.

What President Trump and his allies fail to comprehend, however, is that eliminating these subsidies would likely result in a mass exodus by insurance companies from the individual market, meaning an unknown number of entrepreneurs would be unable to afford health coverage for themselves and their employees, while aspiring entrepreneurs would be unable to start a new business because they won’t be able to pay for their own healthcare or access options under the ACA marketplaces. Indeed, the uninsured rate for self-employed entrepreneurs fell by nearly 40 percent under the ACA, and the number of uninsured small business employees dropped by more than four million. But this most recent action to undo the ACA could reverse these gains.

President Trump must understand that killing the ACA by any means necessary is a win for no one. Small business owners nationwide depend on provisions of the ACA for quality and affordable insurance coverage, which is why the law must be strengthened rather than undermined. Small employers demand that President Trump reconsider his position, and that he works to make sure all of America’s job creators have access to the health coverage they need.