Free Essay about the Affordable Care Act and Its Impact on Small Business Owners

The Patient Protection and Affordable Care Act also known by its nickname, Obamacare is legislation put in place to provide quality and affordable medical care for all workers across the spectrum of American society. This legislation opens a whole lot of possibilities for individuals who were initially unable to access a medical cover due to their low income. This Act provides regulations to the insurance spectrum and allows for prioritization of the insured's welfare. Through a series of core values such as; increasing the rights and protection of the insured, stricter rules for insurance companies, accountability to the workers in every department and education of the employees on their rights, the Act gives has managed to foster the wellbeing of every person in the society (Boubacar & Foster, 2014). Reception of the ACA remains crucial for the employee as it gives them access to quality medical care and ensuring they are working under more favourable conditions. It is, however, questionable how these rules will affect businesses, this is especially true for small businesses which might not have strong financial abilities when compared to established counterparts. To understand the role played by this act and its value in society, it is worthwhile to address some of the goals of the Affordable Care Act.

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Goals of the Affordable Care Act

From its onset, this act is centered in ensuring that the average individual can access quality medical care at an efficient cost. While it was rather hard to get insurance in the past, this law brought about the efficiency of the insurance industry through giving priority to quality and patient safety, this ensures that the industry is not centered in the money generated too much that they lose focus on the value of life they are protecting. By improving the terms of the insurance policy, the process and period of cover are made more secure (Gruber, 2011). Through the implementation of efficiency laws, the insured is rest assured that they will be attended to at a much more efficient way as compared to before the conditions covered were significantly increased through this implementation and hence better medications.

The act also provides for a significant reduction of medication. This goal is targeted through the entry of government to supplement the insurance processes which eventually leads to a lower cost of medication to the patient. Through the initiative, the government hopes to provide a system that is more consumer-friendly and efficiently use every available resource. By shifting the emphasis from cure and putting effort on giving primary and preventive care, the legislation is expected to reduce the cases of chronic infections that would have otherwise been prevented.

Lastly, the act is also geared towards giving information to the insured and the general public so that every individual is in a better position to access health information. By understanding their conditions, it is expected that every individual becomes more cautious and gets medications for illnesses while at their early stages. Through regular testing, the rate of infections and advancement of illnesses is expected to drop, similarly, through such initiatives the government hopes to give every American citizen better working conditions because every person will be working under conditions that are favorable to their health conditions.

Impact on small business owners

The arrival of ACA has come with mixed feelings for the small business, while this initiative has crucially improved the quality of health care across the country it has also given the owners value and some shortcomings. While there is no clear way to determine whether the Affordable Care Act is "good" or "bad" to a small business owner, we can certainly study somehow it has impacted the business (Buettgens & Blumberg, 2012). These impacts can be categorized as positive and negative impacts according to how they have influenced the undertaking of business.

Positive impacts

Enrolment of the Affordable Care Act has ensured individuals have access to medication which is not only quality but affordable. This has provided the workforce with more healthy and fit individuals. Consequently, the value of work put in by the workers has significantly increased (Buchmueller, Carey & Levy, 2013). From 2018 through 2019, it was observed that workers are more interested to work in their current jobs due to the security they feel due to insurance cover. This attribute has played a crucial role in small businesses as the owners are assured of return in profit due to the increase in workers motivation.

Studies show that a large section of the workers in small companies is youth who are either working part-time or on attachments. Furthermore, during this session, it was observed that more youth are now insured due to lengthening of the period where the youth can use their parents' insurance. Through such initiatives, the owners of the companies are more comfortable because their workforce is well insured (HARRIS, 2016). Due to the nature of the young bodies, the companies with such low cases of illness are more likely to make more profits as the cost going into medication and healthcare for their staff is minimal, a significant change is also observed with the amount of working time these youth can work.

With the implementation of the Act, various other existing laws have been optimized giving the insured more privileges, such as the improvement of Medicaid, Labor Act among other laws. The Medicaid improvement has allowed the provision of subsidies for individuals who might find the insurance system quite high for their income. Bridging the gap between the acquisition of insurance and the citizen has opened a great opportunity for them to get what they would have otherwise found impossible (Blumberg, Buettgens, Feder & Holahan, 2012). By increasing the insured population, the government has ensured that businesses are better placed to handle any condition that may befall their workers. With higher rates of insured individuals, small businesses enjoy better services and therefore higher profits. For the period after 2010, many small businesses offering insurance have seen a significant drop in premiums rises. During this period small businesses have witnessed a slower rise in the premiums they pay to insurance companies; this is also similar to the amount by the employees. Due to intervention by the government, the increase has been so insignificantly small such that the overall increase is negligible. As a result, small companies have ripped a lot from the scheme. It is now easier for small companies to plan their expected profits due to the predictive value of the premiums.

Previously, due to the premiums paid by employers, there was a tendency of employer limiting the amount of insurance given. However, with the drastic intervention by the government and provision of incentives, the employer-sponsored cover has seen a gradual increase. More employers are now considering providing healthcare covers for their employees, this help by the government ensures that small businesses enjoy the privilege of giving its workers insurance which covers a lot more as compared to previous covers and at a relatively lower cost (Petrevska, Petrevska & Petrevska, 2014). As a result of these lower premiums, the small companies have not only managed to give its workers the insurance that they need but has also managed to improve the bond between the staff and the management as employees are appreciating the services offered.

Negative impacts

While it was initially optional for the employer to ensure its workers or not, the implementation of the Affordable Care Act they have the mandate to ensure their staff are insured. This has laid a huge burden on the employers as some of them are struggling with ensuring they remain on the surface with the little funds they are running the company. Failure to respect this mandate is accompanied by huge fines which are devastating to the small companies. The mandate covers several categories of employees which include full-time equivalent (FTE) employees. By expanding this spectrum to cover even part-time employees, the ACA is costing the companies extra cash which they would have otherwise not incurred.

In the event where the business fails to pay its workers, they are heavily fined which leaves them devastated. The law which is more than 10,000 pages has a lot of detail on how to handle the implementation; this includes a strict punishment for non-compliance which to small companies is a blow (Blumberg, Buettgens, Feder & Holahan, 2012). Due to the high cost of premiums paid to the government, most small companies prefer to pay the taxes rather than provide insurance to their staff. Studies show that the number of employers offering insurance to their employees has remained stagnant; this is despite the efforts by the government to enforce the provision of cover. Employers in small businesses consider it better to pay the taxes for evasion of paying the premiums this is because when compared to the amount of money going into the insurance companies, the taxes are much less.

During the implementation of the Affordable Care Act, some huge companies were allowed waivers which gave them more time to adapt to the new system. However, the small companies were never considered because of the insignificant position in the scale of business. This partiality by the government to provide equality left a huge mark in the hearts of small businesses as they were not considered. Furthermore, small companies are restricted from taking the burden of insurance on the consumer, which leaves the small company running at a shrunk budget to cater for the extra expense.Initially some of the small companies where under other some insurance companies which gave them the policy which would be favourable to their budget, these insurance policies ensured the companies were in a position to provide for their workers while within their financial comfort (Blavin, Shartzer, Long & Holahan, 2014). However, the introduction of ACA scraped the validity of these contracts as they no longer complied with the updated outlines of the insurance laws. During this period the small companies were forced to abandon the insurance they had been offering to their employees. After being left to the mercy of state-run exchanges, some of the workers felt neglected, which resulted in the level of productivity.

While the affordable care act is very profitable to companies that have the majority of its workers being young people, the opposite is also true. Those companies with a majority of old people suffer under the directive of the ACA. These companies are forced into severe periods of losses when their workers are sick, provision of leaves and funding for their ailing workers costs the small company a fortune. During the absence of their workers, these companies are forced to provide a substitute worker to take their place and this becomes costly to the company.

Lastly, the act aimed to provide affordable medical care to all Americans; however, various taxes were directed at the pharmaceutical industry. Through what is commonly known as filling the doughnut hole, the government has to implement excise duty fee which results in not only higher cost of production for the medication but also a decrease in the demand for more employees (Auerbach et al.,2011). Such small companies are forced to survive with a small number of employees they have. When the companies are unable to run their daily activities, they are then forced to reduce their employees, this to the business owner means a drastic drop in the production process a...