Federal Appeals Court Ruling Striking Down Key Provision of the Affordable Care Act Will Create Instability for Small Businesses, Economy

For Immediate Release: 
Wednesday, December 18, 2019

Statement by John Arensmeyer, Founder & CEO of Small Business Majority, on what today’s decision rendered by the U.S. Court of Appeals for the Fifth Circuit in the case of Texas v. U.S. means for small business

The U.S. Court of Appeals for the Fifth Circuit made a grave mistake in its ruling today when it declared the individual mandate is unconstitutional and ordered a lower court to reconsider whether the remaining components of the Affordable Care Act (ACA) may remain law. We strongly believe the healthcare law’s components must be upheld in full because the ACA is absolutely critical to the success of our small business community and our economy.   

As we noted previously in an amicus brief filed in this case, the ACA has provided quality, affordable health coverage to numerous small businesses, entrepreneurs and small business employees that once struggled to access health insurance. In fact, more than 5.7 million small business employees or self-employed workers are enrolled in the ACA marketplaces, and more than half of all ACA marketplace enrollees nationwide are small business owners, self-employed individuals or small business employees.

While the penalty for the individual mandate penalty was repealed as part of the Tax Cuts & Jobs Act, we support a previous ruling from the U.S. Supreme Court that declared the individual mandate is in fact constitutional. 

The ACA must be upheld in full because it has helped address the two biggest issues facing small business healthcare: access and affordability. Because the law makes it much easier for the self-employed to obtain their own coverage, many more aspiring entrepreneurs have escaped “job lock” and been able to go out on their own to start new ventures. And the growth in small business healthcare costs has slowed dramatically since 2010, following regular double-digit increases prior to the law’s enactment. What’s more, the law has enabled most states to expand their Medicaid programs, allowing low-income small business employees and entrepreneurs to obtain health coverage.

Creating additional uncertainty over the future of the ACA is a disaster for America’s entrepreneurs: We are concerned this will cause a rapid rise in healthcare costs and create substantial economic instability. This is why the constitutionality of the ACA must be upheld in order to prevent further chaos and confusion in our healthcare system. If this case goes before the Supreme Court of the United States, we hope the court swiftly rules in favor of the ACA, for the good of our country’s entrepreneurs and our economy.

About Small Business Majority

Small Business Majority was founded and is run by small business owners to ensure America’s entrepreneurs are a key part of a thriving and inclusive economy. We actively engage our network of more than 58,000 small business owners in support of public policy solutions and deliver information and resources to entrepreneurs that promote small business growth. Our extensive scientific polling, focus groups and economic research help us educate and inform policymakers, the media and other stakeholders about key issues impacting small businesses and freelancers. Learn more about us on our website and follow us on TwitterFacebook and Instagram.