The Agenda for America's Entrepreneurs: Healthcare

Access to affordable, quality is vitally important to small business owners because they and their employees have historically comprised a disproportionate share of the working uninsured. At the same time, those small businesses with coverage paid 18% more on average than larger companies. This changed when the Affordable Care Act (ACA) was enacted, which strengthened the small group market and provided healthcare to millions of small business owners. Indeed, more than half of all ACA marketplace enrollees are small business owners, self-employed or small business employees. 

But rollbacks to the ACA under the Trump Administration—including expanded access to junk plans and association health plans—have destabilized the market and caused small businesses and their employees, particularly women and people of color, to pay higher premiums at a time when affordable coverage is needed most. 

We must protect and strengthen our nation’s healthcare system and the ACA. This will help close inequities in health coverage that plague our small business communities. 

Top three priorities for Congress to support small business

• Make permanent the premium assistance provided by the American Rescue Plan that has helped make healthcare more affordable for many entrepreneurs. In particular, we support increasing premium assistance to those who are otherwise eligible for premium tax credits and expanding subsidies to people making more than 400% of FPL.
• Address the rising costs of prescription drugs, as these costs are  hurting small business owners' bottom lines.
• Allow consumers who are offered employer-sponsored insurance to instead receive premium assistance for marketplace coverage if they choose. This would eliminate the “unaffordability” threshold that consumers must currently meet to be eligible. 

Expand access to coverage

• Provide additional health coverage options by allowing people to buy in to Medicare or Medicaid. 
• Expand Medicare coverage to include individuals age 55 and older.
• Allow individuals who have been laid off to sign up for the ACA through a special enrollment period as soon as their employer-based COBRA coverage expires. 
•  Make significant investments towards educating the public about when the annual open enrollment period begins. This must include multi-year funding for consumer assistance in navigating the program and application assistance.

Aggressively address underlying issues of cost and affordability

• Encourage states to take advantage of the Medicaid expansion incentives in the American Rescue Plan since funding will not expire. Roughly 616,000 small business employees could gain coverage if all remaining states expanded Medicaid.
• Calculate marketplace premium tax credits based on the cost of a gold-level plan (80% actuarial level) instead of a silver-plan (70% actuarial level). 
• Base marketplace assistance on consumers’ previous year income rather than their estimated current year income, which currently results in consumers having to repay subsidies when they underestimate future income.
• Pass healthcare tax equity for the self-employed so that freelancers can deduct their healthcare expenses from their FICA tax obligations-just like other business entities.

Strengthen market stability

• Block the extension of short-term, limited duration insurance plans. These plans are intended to fill gaps in coverage in the event of job loss or other life changes, but are not required to cover essential health benefits like prescription coverage or mental health treatment and can come with hefty deductibles. Leaving them in place will cause younger and healthier people to leave the marketplaces and create an unbalanced risk pool that raises costs for everyone else.
• Repeal regulations that broadened access to association health plans (AHPs), which would encourage younger, healthier groups to purchase inadequate coverage, thus increasing costs for most of the small group market.
• Create a reinsurance program to help stabilize premiums in the health insurance marketplaces by providing support for insurers facing high financial losses.
• Strengthen risk adjustment for carriers to keep costs down for consumers and incentivize insurers to remain in the health insurance marketplaces.