Indiana businessman says he won’t expand because of Obamacare

WASHINGTON – An Indiana businessman told lawmakers Wednesday he has purposely kept his companies small to avoid having the number of workers that would require him to provide health insurance under the Affordable Care Act.

“We have felt the profound imposition of the Affordable Care Act or, as it is known among many small-business entrepreneurs, the Unaffordable Care Act,” said Joe Sergio, president of The Sergio Corp., a South Bend parent company of a disaster restoration business and an industrial cleaning company. “Obamacare punishes employment growth, and the incentive is to not grow.”

Sergio testified at a hearing called by Sen. Dan Coats, R-Ind., to examine whether the 2010 health care law has cost jobs.

“Too much of the conversation (about the law) has attempted to focus on the proposed benefits without taking into consideration some of the very real and significant costs,” said Coats, chairman of the Joint Economic Committee.

Coats said the law was oversold to the public by President Barack Obama.

But New York Rep. Carolyn Maloney, the panel’s top Democrat, said Republicans’ dire predictions of the law’s consequences have not come true.

While more than 16 million people have gained health insurance, the private sector has created nearly 3 million jobs since the law’s major provisions went into effect, she said.

“My Republican friends argue that health care reform kills jobs,” she said. “Democrats understand that not having health care kills people.”

Casey Mulligan, an economics professor at the University of Chicago, testified that the law’s income-based insurance subsidies for people not offered coverage by their employer is a disincentive for people to work and earn more than the maximum allowed for receiving a subsidy.

“Fundamentally, when you’re giving stuff to people when they don’t work and earn, you’re going to have a disincentive,” he said.

Mulligan estimated the law will reduce weekly employment and aggregate work hours by 3 percent.

Maloney asked him whether he would consider that to be the “economic ruin” that critics of the law predicted.

“I don’t think the word ‘ruin’ applies to that,” he replied.

While Coats called arbitrary the law’s requirement that companies offer insurance if they have 50 or more full-time employees, another witness said that threshold was not unreasonable.

Before the law went into effect, almost all companies with more than 50 workers offered health insurance to employees, said Paul Van de Water, a senior fellow at the Center on Budget and Policy Priorities.

“So the notion that requiring firms with more than 50 employees to offer health insurance coverage is a tremendous burden is something which is belied by the data,” Van de Water said. “These choices may seem arbitrary, but they were based on a rational effort to structure the law in the best possible way.”

Coats, however, said he has received thousands of letters and emails from Hoosiers complaining about the law. Sergio said the national statistics purporting to show little negative economic effects don’t square with his experience.

“I have not found one company, one person, one employee who has come to me and said, ‘Boy, this is just great!’ ” Sergio said. “I hear 100 percent against the impacts so far.”

Email Maureen Groppe at mgroppe@gannett.com . Follow her on Twitter: @mgroppe.