Cutting HHS Staff Puts Healthcare Access at Risk for Small Businesses

“The U.S. Department of Health and Human Services’ plan to cut about 10,000 staff on top of 10,000 staffers who have already agreed to resign raises serious questions about the future of the Affordable Care Act (ACA) and its ability to deliver for small businesses. This is a major concern for small business owners because so many entrepreneurs and their employees rely on the ACA for quality, affordable health insurance. In fact, more than 6.2 million small business and self-employed workers have gained coverage under the ACA. Thanks to the ACA, the uninsured rate for small business employees dropped from 25.2% in 2013 to 16.3% in 2022. Similarly, the uninsured rate for self-employed individuals fell from 27.3% in 2013 to 16.4% in 2022. None of this would have been possible without the ACA.

 

Despite these impressive gains, the Trump administration has been hostile toward the ACA in both of President Trump’s terms. We are especially concerned that fewer staff at HHS would create an excuse to shorten the ACA open enrollment period, something we already witnessed in President Trump’s first term. Making it more difficult for small firms to participate in the ACA marketplaces ignores the fact that before the ACA passed, small business owners paid, on average, 18% more than their big business counterparts. The ACA has also eliminated ‘job lock,’ allowing workers who once felt tied to their job by their benefits package to seek out their own entrepreneurial path or join thriving small businesses. 

 

In addition to questions surrounding the ACA, we are also worried that staff cuts at HHS could have a negative impact on the administration of Medicaid, a program that is already endangered given that Republicans in the U.S. House of Representatives passed a budget resolution that would allow for reducing Medicaid funds in order to offset tax breaks for the wealthy. Many working adults who don’t receive health benefits through their job or can’t afford their employer’s health plan depend on Medicaid, and many of these individuals are small business owners, work for small businesses or are self-employed. Without access to Medicaid, these individuals would not have health insurance.

 

We know that the Trump administration is determined to make drastic cuts at every agency but cutting back at HHS would hit entrepreneurs especially hard. If fewer small business owners, solo entrepreneurs and small business employees are able to sign up for coverage through the ACA or access Medicaid, we will see a decrease in the number of small businesses as well as the number of employees working for small firms.”