Monday, January 7, 2013

A Small Business' Experience with ObamaCare and Blue Shield of California

I am a partner and owner in a small technical consulting firm that serves high-technology firms in Silicon Valley.  Despite the global financial crisis, we've held on to all of employees in the face of an ever-changing work dynamic and very late payments from some of our clients.

One new wrinkle to our small business' finances is the impact of ObamaCare.  All employees receive have a company-funded health savings account (HSA) backed up with a high-deductible major medical plan, roughly modeled on the highly effective Singapore plan.

While correlation does not necessarily imply causation, we've experience above-average rate increases by Blue Shield of California that seem to be tied to ObamaCare.  The following chart shows our health care premiums dating back to 2007, unadjusted for inflation.

President Obama proposed his vast expansion of U.S. government healthcare back in February 2009.  Four months later, we received a 15% rate hike--slightly ahead of schedule-- followed by another 15% rate hike just seven months later.

President Obama signed ObamaCare into law in March 2010.  Just five months later, we received a massive 29% increase followed by another 1% increase just 66 days later!  Since then, we're back to a 15% roughly every 1.2 years.

The net overall effect is that health insurance premium have more than DOUBLED for our firm in the last five years!  Certainly, part of this is due to the national increase in health insurance premiums (inflation and aging employees).  However, I don't believe it to be a coincidence that the biggest increase happened immediately after ObamaCare was signed into law.

1 comment:

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