CRN Intelligence: Obamacare Has Many VARs Seeing Red


Timothy Shea, CEO of Alpha NetSolutions, a $1.7 million Millbury, Mass.-based solution provider with 18 employees, is fed up with government mandates on health care. In fact, Shea is moving jobs overseas where he has found solid talent and does not have to pay health-care costs. “My last six hires have been overseas,” he said. “That’s how I adapted to Obamacare."

Shea is not alone in his disdain for Obamacare. In fact, 57 percent of respondents in a CRN survey of 246 solution providers said they would like Congress to repeal Obamacare.

What’s more, 51 percent of respondents said the federal health-care legislation known as Obamacare has led to higher health-care costs for their company, 40 percent said it had no impact on health-care costs, and just 9 percent surveyed reported that it had led to a reduction in their company's health-care costs.

[Related: 5 Obamacare Website Failures That Could Have Been Avoided]

Of those CRN survey respondents that have seen higher health-care costs for their companies, 49 percent said their health-care costs were up from 1 percent to 20 percent, 35 percent said their health-care costs were up from 20 percent to 40 percent, and 10 percent said their health-care costs were up from 40 percent to 60 percent.

As for the impact on hiring for 2014, 27 percent said it had led to a decrease in hiring, 68 percent of respondents said it had no impact on hiring, and just 4 percent said it led to an increase in hiring.

Shea said his health-care costs began to soar in 2007 when a Massachusetts health-care reform law went into effect that was championed by former Massachusetts governor and onetime GOP presidential candidate Mitt Romney. "It's the 13th round for us," Shea said of his Massachusetts business colleagues. "We already have had our teeth kicked in by Romneycare."

After grappling with double digit health-care cost increases for five years for the 18 employees covered by his company's Blue Cross insurance plan, Shea said he got a break last year with a 4 percent reduction in health-care costs for his company. What's troubling, according to Shea, is that he has no idea why those costs went down. "I have no idea how they came up with those costs," he said, describing a problem many solution providers say they grapple with every year when it comes time to renew their health-care plans. "That's what makes it so difficult to plan for health-care costs. I certainly am not assuming the dip is going to be permanent."

Of those CRN survey respondents that have seen lower health-care costs for their companies, 67 percent said they had seen a 1 percent to 20 percent reduction in health-care costs, with 14 percent saying their health-care costs were down 20 percent to 40 percent.

Pat Gallagher, owner of Data Logic Systems, a one-person IT consulting shop based in Waukesha, Wis., is one of the 43 percent of solution providers surveyed by CRN who does not favor a repeal of Obamacare. Gallagher, who is still providing small-business IT services, did not have health insurance for himself, his wife or his five children for the past 30 years while running his own business. He said the federal health legislation would have saved him an "awful lot of money" if it was available when his wife passed away from cancer 15 years ago.

"This law is going to prevent an awful lot of bankruptcies," said Gallagher. "This is going to be a good thing for everybody."

Gallagher compared the passage of Obamacare to the controversy that surrounded Medicaid when it was first passed into law as part of the Social Security Amendments of 1965. "If it wasn't for Medicaid you'd have an awful lot more people on welfare," he said. Gallagher expects the legislation to ultimately reduce health-care costs since fewer people will be relying on more expensive emergency room care. He said he has seen a $16 increase in one of his medicines since the law was enacted, but he also has seen a reduction in costs as a result of his annual physical being covered in full.

Gallagher said he objects to what he called incendiary disinformation surrounding Obamacare. "It started with [Sarah] Palin talking about death panels," he said. "A lot of people were making the case that this was going to ruin the country. It hasn't. You just have to give it a chance."

NEXT: The Origins Of Obamacare