Repealing the new healthcare law would be a setback for millions who have gained coverage and be bad for business, U.S. Treasury Secretary Timothy Geithner said Wednesday as the House of Representatives prepared to vote to do just that.
“Repealing the Affordable Care Act would be bad for business and bad for the economy,” Geithner argued in a blog posting on the Treasury’s website.
He said the economy is in a crucial stage and repealing the ACA “would be a step in the wrong direction.”
While the House, which is controlled by Republicans, is expected pass the repeal bill, most observers expect that repeal bill to die in the Senate, where Democrats remain in control.
Republicans have claimed that healthcare law will cost the country jobs due to its costs and regulations. They claim firms will drop employees in order to avoid having to provide coverage.
The Congressional Budget Office has estimated that repealing the legislation will add $230 billion to budget deficits over the next 10 years. But Republicans have argued the opposite, that it will make deficits worse.
In his blog, Geithner pushed back on Republicans’ arguments, maintaining that by extending coverage to most Americans, the law will eventually slow the rise in premiums and introduce more certainty into health costs.
“The ACA helps businesses and the overall economy by eliminating hidden costs that currently contribute to higher health care premiums charged to businesses and the government,” he said.
An American worker with a health plan pays an average of $1,000 extra in premiums each year to help pay for those who do not have insurance, the Treasury says. Expanding health insurance coverage to nearly 95 percent of Americans will help to bring down premiums by removing this added cost, Geithner wrote.
“In the absence of reform, health care costs are projected to rise at an unsustainable rate, which will make it increasingly difficult for both businesses and the government to provide health insurance,” he said.
He said the law has benefits for small businesses that have struggled to compete with larger businesses and attract the best workers because of difficulties in providing health insurance.
He said the law helps small businesses offset health care costs through a tax credit that is worth up to 35 percent of health insurance premiums and is available immediately. This credit is scheduled to rise to 50 percent starting in 2014.
He said the health insurance exchanges created under the law that begin in 2014 will allow small businesses to pool their buying power and benefit from reduced administrative costs.
He also said the law prohibits insurers from inflating premiums when a small business employs a sick worker.
By guaranteeing health coverage for workers, regardless of their employment status or where they work, the law also “increases the flexibility and dynamism of the labor market,” he argued. Workers will be able to transition between jobs without worrying about losing their insurance– and this will result in “increased entrepreneurship” and “better matches between employees and employers,” according to Geithner.