It’s all too often a fact of life for workers in small businesses; your employer just can’t afford to give you health insurance.
Here at the Wisconsin Alliance for Women’s Health, we’re telling the same story. As a small non-profit with only a handful of employees, it’s not feasible for us to offer health insurance benefits. It’s a story shared by millions, because over the past ten years, the number of us – the employed but not insured by our employer – has grown drastically. Less than 50% (down from 58% in 2003) of employees in companies with <50 workers have the opportunity to purchase health insurance through work. This is drastically different from the 90% of employees in companies of >100 workers who have access to health insurance through their jobs. You can read more in this recent Commonwealth Fund brief.
This disparity affects those in the smallest firms and those with the lowest wages (especially those earning under $15/hr). These are also the individuals who likely cannot afford to purchase health insurance on their own, but also may earn too much to qualify for Medicaid, especially if they do not have children. In fact, 44% of workers who try to purchase insurance in the private market end up not doing so, and most cite reasons such as being unable to afford the rates, being denied or charged more due to pre-existing conditions, or just being unable to find a plan that gives them the coverage they need.
So why do small businesses keep following this trend of dropping health insurance? First, because of their size – small companies are not penalized by regulations requiring businesses to provide health benefits. Second, due to the nature of the health insurance market – small businesses are not influential and large enough to control healthcare costs over time, which makes them more of a risk for insurers.
A report from HCTrends and the Congressional Budget Office shows that around 25% of Milwaukee companies with 20-99 employers are going to drop employer-based insurance plans and allow their workers to purchase insurance through the Exchange in 2014. Companies cite rising prices for their decisions to drop health benefits; small businesses estimate at least an 8% rise in costs next year, but larger companies (with >100 employees) only foresee, at most, a 5% increase.
The Affordable Care Act will help remedy this pervasive problem in a big way. In addition to offering tax credits to small businesses in order to offset the cost of premiums, the Small Business Exchange (SHOP) will allow small companies access to a selection of more affordable insurance plans with a larger, shared risk pool, which they can then extend to their employees.
The Wisconsin Alliance for Women’s Health is looking forward to January 2014, when the Wisconsin Exchange will be in place and allow our employees – along with many other Wisconsinites – the opportunity to purchase affordable coverage that provides the services that women need.