Business Owner Says Obamacare Prevented New Hiring as Health Care Costs Increased 51 Percent

1 in 4 small businesses are choosing not to expand as a result of the law

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A business owner told lawmakers on Tuesday that Obamacare has prevented new hiring because health care costs at his company increased by 51 percent.

Thomas Secor, president of Durable Corporation, a small manufacturing company that employs 37 individuals, testified at the House Small Business Committee hearing that the Affordable Care Act has made providing health care coverage for workers more difficult.

"Health care is certainly one of the most vexing problems facing small businesses. The enormous costs and ongoing uncertainty surrounding our health insurance system is a major cause for concern," Secor said. "As a business operator, I am deeply troubled by the ongoing difficulties our health care system creates for my fellow small-business owners and their employees, and by the fact that the most recent national effort to reform the health care system has done very little to address the costs we, as small-business owners, face."

Secor represents the National Small Business Association, which has more than 65,000 members. According to one of the association's surveys, one-third of small businesses said they held off hiring due to high health insurance costs. One in four small businesses have chosen not to expand as a result of Obamacare and half of the businesses surveyed said they held off salary increases.

"Fewer and fewer small businesses, especially those with fewer than 50 employees, offer health insurance as an employee benefit," Secor said. "This is not because they do not want to, or cannot find an insurance carrier in their market; it is because they simply cannot afford to offer a plan."

Secor said that from 2013 to 2017, the average total cost per employee for health insurance coverage has increased by 51.7 percent. The business pays 70 percent or more of the cost of employee coverage.

According to the association's survey, 90 percent of businesses said they saw health insurance premium increases at their most recent renewal and 95 percent said they saw increases over the past five years. Twenty percent of firms saw premium increases of more than 20 percent.

In addition to the costs of premiums, businesses are faced with high costs associated with paperwork and regulatory demands. For example, it takes a firm 13 hours per month on average to be up to date on all of the changes associated with health care.

"Given the estimated substantial increase in cost to provide an ACA-approved product and the regulatory uncertainty, I made the hard decision that we had no other choice but to discontinue our health care benefits," said Secor. "Unfortunately, I am not alone in facing this type of dire situation."

"The majority of small firms expect to continue seeing cost increases in the coming years, and cost continues to be the number-one factor in determining whether or not a small firm is able to offer its employees health insurance," he said.

Ali Meyer

Ali Meyer   Email Ali | Full Bio | RSS
Ali Meyer is a staff writer with the Washington Free Beacon covering economic issues that expose government waste, fraud, and abuse. Prior to the Free Beacon, she was a multimedia reporter with CNSNews.com where her work appeared on outlets such as Drudge Report and Fox News. She also interned with the Heritage Foundation and Pacific Research Institute. Her Twitter handle is @DJAliMeyer, and her email address is meyer@freebeacon.com.

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