1. San Diego Miramar College
John E. Escudero
Economics 121
Professor Otto Dobre
12 December 2013

2. Escudero1
John E. Escudero
Professor Otto Dobre
Economics 121
12 December 2013
“You Can Keep What You Have”
The Patient Protection & Affordable Care Act was ominously signed into law on March
23, 2010, a triumphant day for President Barack Obama and the Democratic Party. Also known
as Obamacare, the measure has sparked controversy, fear, and confusion between individuals,
households, and small businesses throughout the United States. President Barack Obama
reassured Americans that they would be able to keep their current health care plans and doctors if
they were satisfied with what they had, but he did not highlight the millions of plans that would
be considered unacceptable under the standards of Obamacare. That being said, millions of
Americans are beginning to feel the full brunt of the deceptive Obama Administration and
strongly believe that Obama, “over-simplified and over-promised,” when addressing Americans
and boasted, “You can keep what you have,” under the 2010 measure (Durando). To add insult
to injury, the launch of the now infamous online insurance marketplace, HealthCare.gov, was
mired with significant software flaws and hardware glitches. The failures renewed questions
concerning the Obama Administration’s competency that resulted in the appalling miss
management of the important website (Dwyer). Obamacare has triggered economic uncertainty
and is beginning to lower overall confidence on Wall Street. That has resulted in a pause in the
recent economic rebound that was slowly gaining momentum according to thirty-nine percent of
U.S. chief executive officers. This claim is based on the effects of Obama’s healthcare reform
law and other regulations, “that continue to stymie U.S. employment and capital spending.”

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Obamacare has made it difficult for businesses to make economic decision with any confidence,
invest capital for new construction, or hiring new workers.
On June 28th , 2012, the Supreme Court ruled that components of the health care law such
as, “the individual mandate,” which requires all Americans to purchase health insurance or pay,
“the shared responsibility payment,” was in fact constitutional (Wegman). Although millions of
Americans felt passionately that several provisions of Obamacare were unconstitutional, the
individual mandate clause in particular, the Supreme Court’s ruling made it crystal clear that
Obamacare was here to stay – at least for now. So the million dollar question that everyone is
asking is, “how will Obamacare affect individuals, households, and small businesses?” As far as
the individual is concerned, “the shared responsibility payment,” for failure to not have health
insurance coverage will be the greater of 2.5 percent of an individual’s income or $695. Not
having health insurance will not be considered unlawful or have any legal consequences,
nonetheless, the uninsured will be required to submit a payment to the IRS if they fail to
maintain health coverage. President Obama’s broken promise, “If you like your current
healthcare plan you can keep it,” drew heavy criticism after reports of 3.5 million Americans
who paid for their own plans in the individual market lost their coverage in November of 2013.
As a result of these new rules and new requirements, many healthcare providers sent out
cancellation notices to millions of unfortunate Americans. Many folks, “have lost what they
have,” due to the sweeping reforms and restructuring. Eventually, small business will be subject
to a similar fate as the individual American.
Small businesses will soon be next on the chopping block and a ripple effect will hurt
individual and households once more. Small businesses that employ less than 50 workers are
currently not obligated to provide coverage under Obamacare law. However, if a small business

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does decide to provide healthcare plan options for their employees, the policies enforced under
the small group market will be held to the same standards and regulations that are now forcing
the cancellation of millions of competitive healthcare plans that are sold directly to individuals.
To date, small businesses that employ less than 50 workers have been exploiting a loophole
found in the Obamacare law. If businesses are savvy they can renew existing plans before the
end of 2013, those plans would not be subject to the costly Obamacare mandates for another full
calendar year, in most cases lasting until the end of December 2014 (Gottlieb). Some individuals
and families may be lucky enough to hold out for another year and hopefully stay insured; all the
same, the hourglass has been turned over.
A devastating and somber holiday season lies ahead for millions Americans in 2014. An
unfathomable number of hard working folks may receive the same notices that are currently
being mailed to individuals this holiday season informing them that their existing healthcare
plans have been terminated. The only option for smaller businesses will be to explore policies
that are compliant with Obamacare. These plans will be undoubtedly more expensive. The end
result will be that small businesses in America will, to put in simply, be financially incapable of
providing any type of affordable, reasonable, or fair health insurance benefits to their employees.
This factor will have a devastating effect on small businesses in America, many which have been
struggling already due to the Great Recession. Small businesses will have to tell their employees
to try their luck on the exchanges. There will be repercussions over the horizon that will have
disastrous effects on small businesses. Try to imagine what can happen if small businesses lose
the ability to offer competitive incentives that larger firms have the ability to, like offer
healthcare for their employees and their families? To just scratch the surface of the idea, small
businesses will undoubtedly find it more difficult, if not totally impossible to hire, “the cream of

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the crop,” of potential candidates. Many recent graduates may decide to not even apply or accept
positions at small businesses that do not offer healthcare packages. Ironically, the job market is
extremely competitive and millions of Americans who hold degrees are underemployed. More
and more jobs are becoming outsourced or given to foreigners who have a higher education
degree. These citizens from foreign countries easily qualify for H-1B Visas from larger firms
who in turn pay them significantly less than their American counterparts. This practice has been
driving salaries down. So does that mean Americans should get comfortable with less?
Moreover, strong candidates may not envision themselves an employee or a manager of a
smaller businesses. The fact of the matter is that they will make less if you factor in the cost of
healthcare. How would they be able to find that opportunity worthwhile or a solid career move
after working so hard and graduating with the hopes of starting a family. More likely than not,
they will see small business jobs as only stepping stones for future opportunities at larger firms
who do have reasonable benefits for their employees. Highly skilled and well educated
candidates may prefer to exclusively work in the corporate environment and we may see a
further decline of the middle class as the wealth of American consolidates to even worse levels
than now. To put things in perspective, the Chief Executive of Aetna, Mark Bertoline,
apocalyptically warned Americans that he expected, “premiums for individuals or small groups
seeking coverage on healthcare insurance exchanges will rise by 20 to 50 percent in 2014
(Gottlieb).”
President Obama flat out lied to Americans when he claimed that the Affordable Care
Act would help small businesses. The White House website even boasted that, “Obamacare will
make it easier for businesses to find better coverage options,” also, “stops insurance companies
from taking advantage of you, giving the consumer and business owners more control, making

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healthcare coverage more affordable.” According to Public Opinion Strategies, small businesses
are not buying it at all. In a recent survey conducted in September through October for the U.S.
Chamber of Commerce and International Franchise Association, it was revealed that among 400
business owners with between 40 and 500 employees, an overwhelming 64 percent of the
franchise owners believed that the law will have a negative impact on their businesses. Only a
minuscule 5 percent expect a positive impact. The non-franchise businesses ratio was a telling
53 percent negative and 12 percent positive. Only a pitiful one in twelve believed that
Obamacare could help their businesses. The report also found that 27 percent of franchise
businesses and 12 percent of non-franchises have already replaced full-time with part-time
employees in anticipation of the law’s employer mandate provision. Obamacare defines a full-
time employee as anyone who works more than 30 hours a week. Furthermore, many businesses
will no doubt implement the “49er strategy”, and cap their employment at 49 to avoid 50 full-
time.
Americans are beginning to see just the tip of the iceberg of the undesirable and
unintended effects of Obamacare that was entirely predictable by many free-market economists
(Murphy). A huge spike in cost for individual healthcare should be expected once all the layers
of the Obamacare becomes fully realized. The largest spike will occur on plans that offer bare-
bones, catastrophic coverage policies that typically require large deductibles and low caps.
According to a CNN article, officials in Florida predict a dramatic increase in the cost of
healthcare plans, ranging anywhere from between 7.6 percent to a whopping 58.8 percent, while
in Ohio the estimate is an average increase of 41 percent (Murphy). Americans in general are
going to pay much more for Obamacare then “what they have now”, and most likely it will be in
the form of federal tax increases. The “keep what you have” promise was also another easily

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predictable impossibility according to economists. Millions of plans simply did not meet the
standards or were unprofitable for healthcare providers under Obamacare, and were eventually
eliminated altogether. Most of these plans were of the “catastrophic” type coverage for self-
employed individuals that included high deductibles. Obama officials originally projected that
93 million Americans had plans that would eventually fall under the “unacceptable” category for
Obamacare. According to economists, job losses will also increase as Obamacare rolls-out and
becomes fully implemented. It should not be a shock to Americans that if the government forces
employers to provide a benefit to their workers, it will be unprofitable for those businesses and
firms who have to comply to the reforms. Businesses would have already otherwise included a
health benefit in compensation packages in order to attract good workers, thus improving
employee morale and good work performance by satisfied workers. If the government mandate
only applied to companies that employ 50 or more full time employees, than of course firms will
only hire 49 full time employees if at all possible. Furthermore, if it only applies to workers who
work 30 or more hours per week, than limiting employees to 29 hours per week should not come
as a total shock. Firms will always try to maximize profits and minimize costs. When the
government steps in and forces the matter, it only hurts the normal flow of business. These costs
will reflect back upon consumers and overall prices for goods that will be sure to increase to
offset the losses that firms will experience as a result of Obamacare.
The Patient Protection and Affordable Care Act was a historic achievement for the
Obama administration and the Democratic Party. Sadly, it was passed without a single
Republican vote. This political polarization may be the downfall of Obamacare. Unfortunately,
years and decades of hard work may be lost in vain. The Republican Party has been launching
legal and legislative challenges to Obamacare since day one. The reelection of Obama in 2012

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was a big blow to Republicans in their efforts to derail Obamacare; nonetheless, the GOP has
continually targeted politically vulnerable provisions of the law. Although Speaker of the House
John Boehner conceded after the reelection by saying that, “The Affordable Care Act is the law
of the land,” the fate of Obamacare is still uncertain (Oberlander).
It has been a deplorable roll-out for Obamacare thus far, from the website blunder to the
“You can keep what you have” failed promises. More importantly, if the Affordable Care Act
fails, it may destroy any further political appetite for large-scale government reforms.
Republicans and Democrats will have to work together and Americans will have to be willing to
pay more taxes in one way or another and show support for the measure. Much of the woes of
Obamacare have been exploited by the Republicans for political leverage; nonetheless, it is clear
that there are many problems that need to be resolved and the government needs to be way more
proactive in addressing and tackling old and newer issues as they arise. But should hiccups not
be expected with such a massive reform roll-out? Secondly, are Americans being overly critical?
Perhaps Americans are beginning to realize that they do not want to help the less fortunate and
poverty stricken. Have years of economic worries changed the way the majority feels about
socialized healthcare reform? In economic terms, if Obamacare turns out to be everything that
was promised, it will be beneficial for the majority of Americans who pay for health insurance
on the individual market. The trade-offs will be that healthy Americans, who are neither rich nor
poor, will have to pay more money overall (Stevenson). One thing is for certain, change is on
the horizon.

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Works Cited
Durando, Jessica. "Obama Vows Repeatedly You Can Keep Your Doctor." USA Today. Gannett,
28 Nov. 2013. Web. 05 Dec. 2013.
Dwyer, Devin. "White House Declares Obamacare Website Fixed, But Problems Persist." ABC
News. ABC News Network, 01 Dec. 2013. Web. 05 Dec. 2013.
Ron, Fournier. "National Journal." NationalJournal.com. National Journal Group Inc., 04 Dec.
2013. Web. 06 Dec. 2013.
Gottlieb, Scott. "Thousands Of Small Businesses Will Also Start Losing Their Current Health
Policies Under Obamacare. Here's Why." Forbes. Forbes Magazine, 06 Nov. 2013. Web.
30 Nov. 2013.
Jacobsen, Katherine. "Obamacare 101: What College Students Need to Know?" The Christian
Science Monitor. The Christian Science Monitor, 02 Oct. 2013. Web. 05 Dec. 2013.
Oberlander, J., PhD. “The Future of Obamacare.” The New England Journal of
Medicine, 21Nov. 2012.
Robert, Murphy P. "The Economics of Obamacare." Advancing Austrian Economics, Liberty,
and Peace. Ludwig Von Mises Institute, 14 Nov. 2013. Web. 06 Dec. 2013.
Scheyder, Ernest. "Obamacare Uncertainty Harming Economic Rebound, CEOs Say." Reuters.
Thomson Reuters, 04 Dec. 2013. Web. 04 Dec. 2013.
Stevenson, Merril. "Right Point, Wrong Example." The Economist. The Economist Newspaper,
20 Nov. 2013. Web. 30 Nov. 2013.
Jesse, Wegman. "Explaining the Supreme Court Ruling on Obamacare." The Daily Beast.
Newsweek/Daily Beast, 28 June 2012. Web. 07 Dec. 2013.