Allowing Small Businesses and the Self-Employed to Buy Health Care Coverage through Public Programs

Abstract

The large number of uninsured working Americans and the extent of public support enjoyed by employment-based health insurance argues for a coverage initiative that fosters access to affordable benefits through employment. This proposal, which reflects models in both Massachusetts and Michigan, entails the development of publicly organized and subsidized group health insurance for small firms with low-wage workers. States would provide overall administration and subsidies to both employers and employees. Employers would enroll workers, select insurers, pay premiums, and report data on employment status. The program would be a legislative extension of the State Children's Health Insurance Program (SCHIP), with federal financing to participating states at each respective SCHIP rate. Anti-crowd-out provisions would be included. This program is both administratively and politically feasible. It is also consistent with current thinking regarding public/private partnerships and the desirability of preserving a voluntary employer-sponsored health insurance system.