How cuts to Medicaid and ACA Premium Tax Credits could hurt your small business
The United States Congress is working to pass a budget that proposes steep cuts to Medicaid and fails to extend tax credits that make healthcare premiums through the Affordable Care Act (ACA) marketplaces more affordable. Without these safeguards, many small business owners and their employees will see their healthcare costs increase, and some could even be left without healthcare coverage.
To help you better understand how these changes could hurt your small business, we’ve compiled key information you need to know as you navigate potential changes to healthcare policy this year.
What is Medicaid, and what’s at stake?
Medicaid is a joint federal and state program that offers free or low-cost health insurance for people with limited income, including children, pregnant women, seniors, people with disabilities and low-income adults. In each state, Medicaid can have different names such as Medi-Cal, MassHealth, TennCare and more.
Medicaid helps one in four Americans, including more than 7 million small business workers. If the federal government reduces the amount of funding that state Medicaid programs receive, states will likely be unable to supplement this lost federal revenue, leading to fewer healthcare options at higher prices for small businesses and their employees.
Cuts to Medicaid may also eliminate enhanced federal funding for state coverage of low-income, working-age adults who were made eligible for Medicaid under the Affordable Care Act. Reducing this access will lead to lower income self-employed entrepreneurs and small business employees losing access to coverage through their state’s Medicaid program.
What are healthcare premium tax credits, and why do they matter?
Healthcare premium tax credits—also known as premium assistance and subsidies—are discounts on health insurance premiums for plans purchased through the Affordable Care Act (ACA) marketplaces, or Healthcare.gov, based on your income and family size. These premium tax credits, that help eligible individuals and families cover the premiums for their health insurance, are set to expire at the end of the year.
More than half of all ACA marketplace enrollees own or work for a small business. If the enhanced subsidies expire, individuals who make more than 400% of the Federal Poverty Level (FPL) will not receive any subsidy and those who make under 400% of the FPL will get a smaller subsidy. Additionally, insurance premiums could increase by 25-100%, causing millions of enrollees, including small business owners, their employees and families, to lose access to affordable health coverage.
How would losing access to affordable healthcare impact your business?
Sharing your lived experience helps show lawmakers how healthcare cuts affect real people. Tell us your experience by filling out our survey to help shape the future of healthcare policy for small businesses! Access additional health care resources to help you better navigate these changes.