Our Business' Real-World Experiences with ObamaCare and Blue Shield of California

Remember how the "Affordable" Car Act (ACA), a.k.a. ObamaCare would going to make health care--er, well--affordable?  As usual, be afraid when somebody says, "I'm from the government and I'm here to help you."  Here's our small business' real-world experiences with ObamaCare.  We are admittedly a small company so our experience, while certainly not unique, may not apply universally.  The number of employees has not changed since 2008.

Note the rapid procession of increases after President Obama proposed what eventually become the "Affordable" Care Act (ACA) and the large increase  (30%!) shortly after the President signed the bill into law after it passed Congress on a one-party, majority-forced vote.

According to the Society of Actuaries, even more "good news" awaits California's small businesses, with up to 62% more increases coming by 2017.  Supposedly, there will eventually be a small business credit under ACA, but I'll believe it when I see it.  Currently, it just means that our health care insurance costs have DOUBLED in the last four years with no improvements in benefits or services.  Thank you, Washington!  It's there somebody else that needs your "help"?

Now, back to figuring out how to double our revenues in less than four years to pay for all this "help".

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.