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The ACA was adopted by the 111th Congress of the United States in 2010. At the moment, no one would have imagined that Obamacare’s appeal would later have damaging consequences on US entrepreneurs. Small company owners feel a lot of ripple effects. Obamacare’s notable consequences entail an uptick in the underlying value of privately purchased health benefits, an increase in health benefit premiums, cancelations of small business policy, prescription drug costs, and other concerns. This, in particular, has led investors to lose interest in Obamacare, making them more costly and thereby adversely impacting small businesses. Those seeking employment and other factors relating to them are affected too. This article explains the ripple effects of the Obamacare on small firms.
Small business has considered health insurance a top issue for many decades, but of late there have been emerging issues in regards to the implementations of the ACA and the impacts it has on the small business and its entrepreneurs. Americans have adopted the employer sponsored health insurance systems predominantly. Consequently, small business owners have had to incur high costs regarding complicated paperwork to premiums which are very high (Gabel, 2014). 75% of small business owners who don’t have health insurance say it’s because the health insurance costs are too high. (Matthews, Loten and Weaver, 2014).
Administrative costs have increased following the implementation of the Obamacare. Small business owners have been coupled with a whole new to-do list. The new responsibilities are in the extra costs entrepreneurs have to incur when hiring professionals or when training them, and sometimes both. Their tasks become tougher when it comes to tracking the employees FTEs correctly in the case of seasonal staffs or in the case they have high turnover. The administration has to follow FTEs carefully to avoid misclassifying employees or else they will face fines (Moran, 2014).
Small firms will experience an increase in premium rates. An estimated that 65% of small businesses would have to raise their premium rates. In a report to the Congress on effects of the ACA, it notes that because of the sections 2701 to 2703. The above sections are of the Public Health Service Act. The report showed that premium rates for approximately 11milion people would rise.
Norton from Pharmaceutical executive observed that prescription drugs would hike in prices, adding that with the four metal plans there will be a 34% drugs cost increment. He notes that Obamacare patients will have to pay more for prescription co-pays, which most termed as unacceptable amounts. The Obamacare patients pay way more as compared to privately covered patients. The reason behind the high costs of the Obamacare insurance is because when the insurers entered into this plan most of their designs were generated based on uncertain assumptions (Norton, 2014).
Also, it is worth noting that the burden which was brought about by the implementation of the ACA has led to most small business owners to suffer headaches. While different government agencies are working on paperwork, ruling and interpretations. A small business owner will be trying to understand the complicated new math which may give them a burden and result in headaches.
In conclusion, we can note that the Obamacare has come with high costs which have been a burden to the small business firms. Owners have to adjust to the new math and all the new regulations. All these new regulations have negative effects to the small business firms and effect to high costs of operation as well as increasing the costs of the health insurance.


Gabel, J. R. (2014). Small employer perspectives on the Affordable Care Act’s premiums, SHOP exchanges, and self-insurance. [Article]. Medical Benefits, 31(3), 10-11

Matthews, A. W., Loten, A., & Weaver, C. (2014). Firms start to drop health plans, back marketplaces. [Article]. Wall Street Journal –Eastern Edition, 264(103), B1-B5

Moran, G. (2014, May). Prognosis: uncertain. Entrepreneur, 42, 50-54

Norton, T. (2014, May 26). Obamacare’s “unacceptable” Rx copays retrieved February 22, 2015, from

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