VARs Slam Obamacare After Supreme Court Ruling

Solution providers blasted Obamacare on Thursday, saying the health insurance law has raised insurance premiums and stunted their growth.

The criticism of the Affordable Care Act came after the Supreme Court ruled to uphold federal subsidies nationwide for the controversial law in a 6-to-3 vote.

"We're talking annual double-digit increases in percentage [in insurance rates]," said Tim Shea, CEO of Alpha NetSolutions, a $1.8 million Millbury, Mass.-based solution provider. "It is so expensive right now that we are forced to use subcontractors more, temps more, just because when I want to hire a guy, I have to factor [in] his or her salary and benefits. … It really slows down your growth."

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Shea says his company has seen a roughly 60 percent rise in expenses to cover employee medical benefits since 2010, when the law was passed. Today, he said, he is paying more than $8,000 a month to cover the nine full-time employees he has on staff. He noted that the two employees he hired overseas cost the company half of what one employee in the states costs because of what the company saves on expenses toward benefits.

"Growthwise, it's affected us," he said. "We've had to be very creative at controlling head count to a degree. They're driving up these costs to make sure people get health care, but what it's doing is, it means less people have jobs because we can't afford to hire as many people. It comes down to this: It helps people who don't have any insurance, and I don’t know how many people that is, but the middle class is getting screwed. For the people who had health care, it is really impacting them. ... I found I really have no choices."

Shea says his company is ideally looking to hire three more employees by the end of the year, but he says he has to limit the number of hires to just one "because of the health-care expenses."

John Deery, founder of JD Associates, a Leominster, Mass.-based solution provider, expressed the same sentiment, saying he has seen his company's expenses to cover employee health care rise about 11 percent, from $85,000 to $94,000, for the 11 employees JD Associates covers.

"It's a tremendous amount of money," Deery said. "The Affordable Care Act doesn’t do anything for me. It's an 11 percent increase on a plan that's already very high. We have to absorb it. We have no choice."

Deery said that his company is looking to add to his staff by the end of the year, but he hesitates before he hires, he said, because of the higher costs for health insurance.

"We're looking to put a couple more people on staff before the end of the year, but it gives you pause," he said. "It certainly factors in. You have to be certain the revenue is going be there to cover the expense. … [The Affordable Care Act] does nothing for what I consider to be small business in America. It doesn’t help me."

President Obama praised the Supreme Court ruling in a news conference from the White House Rose Garden, saying, "There can be no doubt that this law is working."

"This morning, the court upheld a critical part of this law -- the part that’s made it easier for Americans to afford health insurance regardless of where you live," the president said. "If the partisan challenge to this law had succeeded, millions of Americans would have had thousands of dollars’ worth of tax credits taken from them. For many, insurance would have become unaffordable again. Many would have become uninsured again. Ultimately, everyone’s premiums could have gone up. America would have gone backwards. And that’s not what we do. That’s not what America does. We move forward."

This was the second time in three years that the law has survived a Supreme Court challenge. Today's ruling indicates that the law most likely will remain in effect after the president's term ends in 2017. Obama emphasized that the country still has work to do to improve health care, but called Thursday's high court decision "a victory for hardworking Americans."

While solution providers generally disliked the ruling on Obamacare, some said they do see some benefit to the Affordable Care Act.

Allen Falcon, CEO of Cumulus Global, a Westborough, Mass.-based solution provider, called Thursday's ruling important for small-business owners.

"I think in the long term, the Affordable Care Act has the potential to be a very good thing," he said. "Certainly expanding the scope of health insurance coverage will be good for the economy overall. Certainly the legislation has some flaws in it. It's very focused on coverage and doesn't focus on the underlying issue of cost control."

Falcon says that because insurance companies can't turn away someone with a pre-existing medical condition under this law, he doesn't have to worry about not being able to hire someone because his company's health plan wouldn't accept them.

"A healthy reliable workforce is good," he said. "From a broader economy standpoint, long-term, you'll have a healthy economy if people aren’t going bankrupt because they can't pay for medical care. I don’t think the law is perfect, there are areas it can be fine-tuned to better cost control. The more you can remove the cost out of the equation for the consumer, the better the economy will be."

Robby Hill, founder and CEO of HillSouth, a Florence, S.C.-based solution provider that focuses on managing health-care customers, says the Affordable Health Act is a "mixed bag" for his business.

"The health-care industry has continued to grow in size because of it, and is good for our business, but health-care costs for our employees have skyrocketed as well," he said. "We're torn over here. We've enjoyed the opportunity to grow our health-care practices, but we want to stabilize the cost of health care in our country, and I don’t think that has happened yet."

Hill says that rising premium costs are "no doubt" slowing down the number of hires, adding that his company has had to scale back and make adjustments such as making complimentary dental insurance optional instead. He says his premiums have gone up nearly 25 percent this year to cover close to all of the 25 employees on staff.

"I know that looking out into the community today, people are unhappy with the Supreme Court decision, but it does at least provide stability where there were questions," he said. "Now I hope we can move forward and get what we all want in lower costs for health care."

PUBLISHED JUNE 25, 2015