Half of U.S. Small Businesses Think Health Law Bad for Them

From Gallup

by Dennis Jacobe, Chief Economist

Forty-one percent are holding off on hiring because of the Affordable Care Act

PRINCETON, NJ — Forty-eight percent of U.S. small-business owners say the 2010 Affordable Care Act (ACA) is going to be bad for their business, compared with 9% who say it is going to be good, and 39% who expect no impact.

Small-Business Owners' Perceptions of the Affordable Care Act, April 2013

These findings are from a Gallup survey of 603 small-business owners, conducted April 1-5.

Similarly, 52% of owners say the ACA is going to reduce the quality of healthcare they and their employees receive. This contrasts with 13% who feel it will improve the quality of care their employees get, and 30% who see no impact.

Small-Business Owners' Perceptions of the Affordable Care Act's Impact on Healthcare Quality, April 2013

In a separate question, 55% of small-business owners expect the money they pay for healthcare to increase. Five percent expect their healthcare costs to decline, while 37% say the health law will have no impact on what they pay for healthcare.

Small-Business Owners' Perceptions of the Affordable Care Act's Impact on Their Healthcare Costs, April 2013

Owners Already Responding to Healthcare Law

When asked if they had taken any of five specific actions in response to the ACA, 41% of small-business owners say they have held off on hiring new employees and 38% have pulled back on plans to grow their business. One in five (19%) have reduced their number of employees and essentially the same number (18%) have cut employee hours in response to the healthcare law. One in four owners (24%) have thought about eliminating healthcare coverage for their employees.

Small-Business Owners' Self-Stated Actions in Response to the Affordable Care Act, April 2013

Implications

Small-business owners are worried about the way the Affordable Care Act is going to affect their business, with about half believing the law is going to be bad for business, add to their healthcare costs, and simultaneously reduce the quality of care they and their employees receive. This overall impression of the ACA is consistent with owners’ tendency to be more Republican than Democratic, higher income, more against big government, more conservative, and less optimistic than Americans overall.

However, more important for the U.S. economy in the short term is what small-business owners say they are already doing in anticipation of the new law’s continuing implementation. About four in 10 say they are holding off on hiring and new growth plans. About one in five say they are letting people go or cutting employees’ hours. Even after discounting small-business owners’ political views, these actions suggest the ACA could be a significant drag on the U.S. economy — at least in the short term.

See the full survey on the Gallup website here.

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