May 21 2012
(WASHINGTON, DC) –Today the GAO released a letter report on the Small Employer Health Insurance Tax Credit in Obamacare. GAO found that “fewer small employers claimed the [tax credit] in 2010 than were estimated to be eligible.” While 170,300 small employers claimed the tax credit, GAO said “estimates of the eligible pool by government agencies and small business advocacy groups ranged from 1.4 million to 4 million” and noted the cost of credits claimed was $468 million. According to GAO, “employer representatives, tax preparers, and insurance brokers that GAO met with, the credit was not large enough to incentivize employers to begin offering insurance.” Complex rules on FTEs and average wages also limited use, according to GAO’s research.
The GAO report confirms several warnings Senators Tom Coburn, M.D. and John Barrasso, M.D., made in chapter 9 of Grim Diagnosis, their October 2010 oversight report on Obamacare. In their 2010 report, the Senators noted that business leaders were “learning that new small business tax credits in the law actually do very little and do not prevent health care costs for businesses from climbing higher.” This was one large reason they found that “few businesses appear interested in the credit.”
The Senators noted that, “rather than lowering health costs for all businesses and workers, the new law only offers a temporary credit from which one percent of individuals in America will actually benefit.” They concluded because Obamacare “headed the wrong direction,” so Congress needs to repeal the law and replace it with “policies which will spur business expansion and job growth – not policies that will increase health care costs for businesses and employees.”