John Cleveland is willing to pay a lot more for his health insurance next year.
He hasn’t forgotten the pile of hospital bills that awaited him after a seizure while tending to clients at his hair salon in Austin, Texas, four years ago. Once doctors hastily removed the dangerous tumor growing on his brain, a week-long hospital stay, months of therapy and nearly $250,000 in medical bills followed.
The coverage he purchased for years through the Affordable Care Act marketplace covered most of those bills.
“It saved my day,” said Cleveland, who owns three barbershops across the city.
Even though Cleveland’s monthly premiums are expected to skyrocket next year — from $560 to about $682 — he will still enroll in a plan that requires him to pay $70 if he sees a doctor and 50 percent of the cost of any emergency room visit. Still, Cleveland is most worried about some of its employees, who could risk being left without insurance once they see the high prices.
Small business owners are among those most likely to lose if Congress lets generous additional federal grants put in place during the Covid-19 pandemic expire. The impending change threatens not only their own coverage but also that of their employees, who often rely on market coverage.
The question of whether to extend the ACA’s enhanced subsidies that cost taxpayers billions of dollars each year poses a serious policy dilemma for Republicans. After years of unified opposition to Obamacare, the party now faces pressure from one of its most loyal supporters, small business owners, who will bear the brunt of rising premiums if the subsidies disappear.
Most of the roughly 20 employees who work on Justin Miller’s 113-year-old family fruit farm in rural Northern California buy coverage on the Obamacare marketplace.
He wonders what it could mean if market-based health insurance becomes unaffordable for his employees. He worries they might consider leaving his farm for a job with health coverage.
“As a small business owner, especially in a field like ours where the work is tough and we really understand how hard everyone works, we have to look everyone in the eye every day,” Miller said. “Knowing that they’re going to have to pay $4,000 or $5,000 more a year to continue on their insurance is a tough pill to swallow.”
Miller says it already pays a minimum wage of $22.50 and offers sick leave, vacation, pension and housing benefits to employees.
Adding health insurance to his employees, he said, would be too expensive to keep his farm in business.
GOP pollsters issue ACA warning
About half of the 24 million people enrolled in Obamacare coverage are, or are employed by, small business owners — a group more likely to vote Republican and one that overwhelmingly supported President Donald Trump in last year’s election. Farmers, dentists, real estate agents and chiropractors are among the professions most represented among those registered.
Even Trump’s own pollsters found broad support for the Obamacare subsidies, warning that failing to extend them could cost Republicans dearly in next year’s midterms.
A poll conducted last month by Republican pollster John McLaughlin found that a majority of independent voters would be less likely to vote for politicians who voted to let the enhanced tax credits expire.
Given that “about 4 million” people would lose coverage and premiums would “skyrocket 75 percent on average,” the poll also concluded that: “A congressional candidate who lets health care tax cuts expire would also be vulnerable to more pointed messaging.” »
Red states benefited from subsidies
Some red states have seen Obamacare enrollment explode since the federal government began offering additional help paying premiums in the form of more generous subsidies.
Texas and Florida have each added 2.8 million enrollees since 2020, far outpacing the growth of most other states. Together, the two states now account for more than a third of marketplace listings nationwide.
A small group of Republican lawmakers — up for re-election next year, mostly in competitive races — have proposed an extension of the subsidies, urging Democrats to vote to reopen the government while simultaneously imploring House Speaker Mike Johnson to reach a bipartisan deal that doesn’t allow them to simply crash.
At hair salons from Cleveland to Austin, about a third of its 18 employees rely on Obamacare coverage. He talked to them about their health insurance options for next year, but said many hadn’t yet started thinking about open enrollment, which began Nov. 1.
He fears they will be confused when they see the new prices, which currently reflect what customers will pay next year without an extension of additional subsidies.
“There are a few of my barbers who are going to be fine without it, because they’re young and healthy, but I thought I was too when everything happened to me,” said Cleveland, now 47.
Republicans, meanwhile, remain cautious about voting to extend Obamacare’s additional subsidies, said Rodney Whitlock, vice president of consulting firm McDermott+, a longtime congressman and health policy adviser.
No Republicans voted for the additional subsidies when they were introduced in 2021 or continued in 2022. Approving them now, he said, is seen by many as a Band-Aid that would temporarily help a program that GOP leaders have long lambasted as problematic and too expensive.
But, Whitlock noted, many party members realize how the subsidies could affect their changing constituencies. Nearly six in ten Obamacare enrollees live in a Republican-held congressional district.
“Republicans are slowly starting to understand that the bottom third of workers are their voters,” he said. “For the first time, I think they’re getting there. This battleship is turning slowly.”
Rep. Marjorie Taylor Greene, a Georgia Republican who has strongly supported Trump, broke with her party last month, calling on the GOP to extend the subsidies. Greene said in an interview that rising health care costs are the “No. 1 issue” she hears about from people in her district.
“I know a lot of small business owners, like a family of four, and they pay $2,000 a month,” Greene said in the television interview, adding that rising deductibles make insurance barely functional for anything other than disasters.
She warned in another television interview that “ignoring” the issue could be “very bad for the midterm elections” next year.
Miller, the farmer who lives in a conservative northern California district, expects monthly health insurance premiums for himself, his wife and two of his children to rise from $264 to $600. Its deductibles and co-pays are also increasing. He expects all of this new spending to still be on his mind when he goes to vote in next year’s midterm elections, he said. Describing himself as an independent, Miller said he is frustrated that few U.S. politicians talk about the kind of universal health coverage available in other countries.
“I definitely vote for those who will protect American workers, regardless of party,” he said.
