The Patient Protection and Affordable Care Act (PPACA aka ‘Obamacare’) came into being in 2013 with much fan fair and plenty of problems. Not only did the Website for enrolling not work properly, President Obama’s promise that ‘if you like your health care plan, you can keep it’ turned out to be not entirely true as multiple Americans lost their health care coverage after the act went live.
To their credit, the Administration acted quickly to fix the Web site and some 2 million Americans have already enrolled—a far cry from the 7 million that the Administration predicted but not insubstantial progress.
The Transportation industry, quite understandably, has been very wary of PPACA as it represents a potential new cost. Margins are tight for most companies (five cents on the dollar, by some estimates) and given the uncertain state of the economy—as well as the current historically high price of fuel—an additional cost is of considerable concern. However, the number of firms impacted by the change seems to be limited, “96% of all firms in the United States - or 5.8 million out of 6 million total firms - have under 50 employees and will not be penalized for choosing not to provide health coverage to their employees. 96% of those firms (with 50 or more employees) already cover full time workers. That means less than .2% of small businesses (10k out of 6 million) will actually have to provide insurance to full-time employees or pay the shared responsibility fee due to ObamaCare.” (Obamacarefacts.com)
Good news for industry as a whole, but what of Transportation? Are firm in this industry similarly small and probably unaffected by PPACA? As it turns out, the answer is, yes. Although there are some 500,000 trucking companies, 96% had 28 trucks or fewer, and 82% operate with less than 6 trucks. Overwhelmingly, Transportation reflects the broader US industry and is represented by small, independent operator who are unaffected by the PPACA mandate
But what of the nearly 1.5 million independent truckers and the PPACA individual mandate (which would affect the people at firms with less than 50 employees)? The law requires individuals to buy insurance of face a penalty. Historically, healthcare insurance that costs 8% is reasonably priced for individuals and healthcare insurance that costs 9.5% is reasonably priced for job sponsored insurance. Estimates suggest that through PPACA the average American will pay between 3% to 9.5% of their income on health insurance, after cost assistance. (Obamacarefacts.com) However, that price depends heavily on where an individual lives, their health, income, family size, and what type of plan they choose (bare bones to comprehensive). Certain states will have lower premiums than others for the equivalent care. Individuals cannot be rejected for a preexisting conditions, but insurers will charge more for individuals with a history of poor health. Individuals pay less than families, higher incomes pay more than lower incomes and so on.
If it works, PPACA will offer healthcare insurance to a significant portion of the estimated 48 million Americans who have no insurance while possibly lower overall costs and increasing health. Time will tell.