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A flashpoint in the battle to repeal and replace Obamacare

For a myopic view of Obamacare's effect on small business, one can look at its results in Louisville, Kentucky. The state saw one of the biggest drops in uninsured individuals under the Affordable Care Act, from 20.4 percent in 2013 to 7.8 percent in 2016, largely in part to the state's expansion of Medicaid. The state operated its own Obamacare marketplace for two years before moving to the federal exchange in 2017, where today only three insurance companies offer coverage on exchange.

Of late, Louisville has become a flashpoint for the GOP to tout its plans to repeal and replace, with visits from both President Donald Trump and Vice President Mike Pence in recent months to talk about why the ACA isn't working in the state, or elsewhere. The GOP's mantra after winning a House vote to repeal and replace key provisions of the law: Obamacare is failing, insurance companies are pulling out of exchanges, and small-business owners are being squeezed by rising premiums.

The National Federation of Independent Business' "Problems and Priorities" survey for 2016 showed the cost of health insurance remained the top issue for small companies, as it has been over the past 30 years. The conservative lobbying group found insurance premiums have risen 56 percent in the last decade for small firms, and that only 29 percent of small companies offered health insurance in 2016, down from 42 percent in 2004.

Gov. Beshear speaks out

But former democratic Kentucky Gov. Steve Beshear, an outspoken critic of the new administration's policies on health care, says they've got it wrong.

"Well, let's look at it like this: If their definition of a disaster is having 500,000 more Kentuckians getting health care than ever got it before ... and all of our folks starting to get healthier, then I would love to see what their definition of success is," Beshear said.

That being said, the former governor also admits the ACA had varying effects on smaller businesses. "It has been a big benefit for the small entrepreneur with one to four employees, because they couldn't afford health care before, and now they qualify for subsidies," he said.

Entrepreneurs Nicole Stipp and Kaitlyn Soligan, founders of Matson & Gilman, can attest to that. They chose to open their small business in Kentucky based on the ACA's success there. The former New Yorkers say they were able to start their bourbon-tour-and-tasting business only because the subsidies offered under the law have enabled them to get covered and pursue their business.

They say the ACA is good for small businesses and entrepreneurs in Kentucky, and especially other tourism-based companies in Louisville.

Pros and cons

"But there are hiccups and problems for small companies that have 150 to 200 employees," said Beshear. "We need to come up with fixes for small business that find themselves in that situation, but the fix is not to throw the baby out with the bathwater," Beshear said, referring to the American Health Care Act recently passed by the House of Representatives.

Jesse Flynn falls into the category that needs the fix Beshear refers to. Flynn is chairman of the board of Flynn Brothers Contracting in Louisville, a company he co-founded with his brother in 1973. The asphalt-patching business is now owned by its 200 employees via an employee stock option plan, or ESOP.

"When we talk about problems with our company — financial or otherwise — it's something they share," he said of his employee co-owners. As he explains, rising health insurance premium costs are crushing many companies.

Workers at the company qualify for insurance after 90 days, and most are insured via a plan through Humana. A look at how costs have risen is startling. In 2005 individual deductibles were $250 a year; today they are $2,600. Premiums have also doubled during that same time period. He believes reform is needed and is even exploring self-insurance. He's not confident repeal and replace will fix the issue.

"What I thought they were going to do, and why I was a Trump voter, is that I thought they were going to do away with Obamacare. I don't think that's going to happen now — I have my doubts. I see people who promised to do this for years backing off. I am losing faith," Flynn said.