Medicaid is a Critical Insurer for Small Business
This issue brief, developed in partnership by Small Business Majority and the Georgetown University Center for Children and Families, examines the prevalence of Medicaid as a source of insurance for small business owners, employees, and their family members using 2024 data from the Census Bureau’s Current Population Survey Annual Social and Economic Supplement (CPS ASEC). Small businesses are defined as those with under 100 employees. Our analysis of 2019 data prior to the pandemic revealed similar shares. One third of Medicaid enrollees nationwide earn their living at a small business or are the family members of small business workers or owners. About half of these are children whose parent(s) are small business owners or employees, 36% are employees of small businesses, 3 percent are owners of small businesses and the remaining 10 percent are other family members, such as spouses.
- One-third of all people enrolled in Medicaid nationwide are connected to small businesses—specifically small business owners, employees, and children or other family members of those owners and employees. This includes approximately 11 million children with parents who are self-employed or work for small businesses. Small businesses face higher health care costs in the private insurance market making Medicaid a vital insurer for lower wage earners and their families.
- Nationwide 20% of small business owners, employees, and their children or other family members are covered by Medicaid. Large cuts to Medicaid that are moving through Congress will result in millions of people losing health coverage and becoming uninsured, which will threaten the health and economic security of a significant portion of the small business workforce.
- In the Northeast and the West, a higher percentage of small business owners, employees, or family members are covered by Medicaid — likely a result of higher eligibility levels for children and/or the adoption of the Affordable Care Act’s Medicaid expansion, which is an especially important source of coverage for small business employees. In ACA expansion states about one in five people who earn their living at a small business are covered by Medicaid (19%). Many of the cuts moving through Congress target the ACA expansion group.