Increasing Health Insurance Coverage of Workers in Small Firms: Challenges and Strategies

Testimony

Increasing Health Insurance Coverage of Workers in Small Firms: Challenges and Strategies

Testimony before the Finance Committee United States Senate
November 1, 2007

Abstract

Small employers face substantial disadvantages relative to large employers when providing health insurance to their workers. These problems can largely be summarized as higher administrative costs of insurance, limited ability to spread health care risk, and a workforce with lower wages. But the primary barrier to coverage for workers in small firms is being low-income; workers in small firms are more than twice as likely as those in large firms to have family income below 200 percent of the federal poverty level. Significant inroads into reducing the uninsured in this population will require income-related subsidization of insurance coverage.

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