John Cleveland is willing to pay a lot more for his health insurance next year.
He hasn't forgotten the mountain of hospital bills that awaited him after he suffered a seizure while tending to clients at his hair salon in Austin, Texas, four years ago. After doctors rushed to remove a dangerous tumor growing in his brain, a weeklong hospital stay, months of therapy and nearly $250,000 in medical expenses ensued.
The insurance he purchased over the years through the Affordable Care Act's marketplace covered most of those bills.
“It saved my butt,” said Cleveland, who owns three barber shops throughout the city.
Even though Cleveland's monthly premiums are expected to rise next year – from $560 to about $682 – he will still sign up for a plan that requires him to shell out $70 for a doctor's visit and 50% of the cost for any emergency room visits. However, Cleveland's biggest concern is for some of its employees, who may be at risk of going without insurance when they see high prices.
Small business owners are among those who stand to lose the most if Congress allows generous additional federal subsidies during the end of the Covid-19 pandemic. The impending changes threaten not only their own coverage, but also the coverage of their employees, who often depend on market coverage.
Whether to extend the expanded ACA subsidies, which cost taxpayers billions of dollars each year, poses a major political conundrum for Republicans. After years of united opposition to Obamacare, the party now faces pressure from one of its most powerful members. loyal districtssmall business owners who will bear the brunt of rising premiums if subsidies disappear.
Most of the 20 or so employees who work at Justin Miller's 113-year-old family fruit farm in rural Northern California buy insurance through the Obamacare marketplace.
He worries what it might mean if market-based health insurance becomes unaffordable for his employees. He worries they might consider leaving his farm for a job that offers health insurance.
“Being a small business owner, especially in an industry like ours where it's hard work and we really understand how hard everyone works, we have to look everyone in the eye every day,” Miller said. “Knowing that they will have to pay another $4,000 or $5,000 a year to keep coverage is hard to swallow.”
Miller says he already pays a minimum wage of $22.50 and provides sick leave, vacation, pension and housing benefits to employees.
He said adding health insurance for his employees would be too costly to keep his farm in business.
GOP polls raise ACA warning
About half of the 24 million people covered by Obamacare own or work for small businesses, a group that is more likely to vote Republican and overwhelmingly supported President Donald Trump in last year's election. Farmers, dentists, real estate agents and chiropractors among professions most represented among applicants.
Even Trump's own pollsters found deep support for Obamacare subsidies, warning that failure to extend them could cost Republicans dearly in next year's midterm elections.
A poll last month by Republican pollster John McLaughlin found that a majority of independent voters it would be less likely vote for politicians who voted to allow expanded tax breaks to expire.
Considering that “approximately 4 million” people would lose coverage and premiums would “soar by an average of 75%,” the poll also concluded that: “A congressional candidate who allows the health care tax cut to expire would also be vulnerable to harsher messaging.”
Red States benefited from subsidies
Some red states have seen Obamacare enrollment surge since the federal government began offering more premium help in the form of more generous subsidies.
Texas and Florida They have added 2.8 million each since 2020, far outpacing growth in most other states. Together, these two states now account for more than a third of market participants nationally.
The small chorus of Republican lawmakers who are up for re-election next year, in mostly competitive races, proposed an extension on subsidies, calling on Democrats to vote to reopen the government while imploring House Speaker Mike Johnson to work out a bipartisan agreement that prevents them from simply falling by the wayside.
At Cleveland's Austin hair salons, about a third of his 18 employees rely on Obamacare. He talked to them about health insurance options for next year, but said many have not yet started thinking about open enrollment, which began Nov. 1.
He is concerned they will be confused when they see the new prices, which currently reflect what customers will pay next year without the extension of additional subsidies.
“There are a couple of my hairdressers who will have to do without them because they are healthy and young, but I thought that too when this happened to me,” said Cleveland, now 47.
Meanwhile, Republicans remain wary of voting to extend additional Obamacare subsidies, said Rodney Whitlock, a vice president at the consulting firm McDermott+ who has long served in Congress and advises on health care policy.
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 will temporarily help a program that GOP leaders have long criticized as problematic and too costly.
But Whitlock said many in the party are coming to terms with how subsidies could impact their changing constituency. Almost 6 out of 10 Obamacare enrollees live in a Republican-controlled district.
“Republicans are slowly realizing that the bottom third of income earners are their constituents,” 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 backed 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 “issue No. 1” she hears from people living in her area.
“I know a lot of small business owners, like a family of four, and they pay $2,000 a month,” Green said during a television interview, adding that because of rising deductibles, insurance barely works for anything other than catastrophes.
In another television interview, she warned that “ignoring” the issue could be “very bad for the midterm elections” next year.
Miller, a farmer who lives in a conservative area of Northern California, expects monthly health insurance premiums for him, his wife and two children to rise from $264 to $600. His deductibles and copayments are also rising. He expects all these new expenses will still be on his mind when he goes to vote in next year's midterm elections, he said. Calling himself an independent man, Miller said he is disappointed that few American politicians are talking about the type of universal health insurance available in other countries.
“I'm definitely voting for those who will protect working Americans, regardless of party,” he said.
