Small Businesses See Significant Gains From the ACA, Analysis Finds

For Immediate Release: 
Tuesday, October 16, 2018

The creation of the individual marketplaces and the expansion of Medicaid stabilized costs and enabled more small business employees to have health coverage


Washington, DC—Small Business Majority released a new report today that reveals the Affordable Care Act (ACA) has provided a tremendous boost to America’s small businesses. Thanks to the creation of the individual marketplaces and the expansion of Medicaid, more small business employees and solo entrepreneurs now have health coverage than before the ACA was implemented, and the law has stabilized health costs for many of the small businesses that provide coverage.

The analysis, which examines data from established sources, including federal agencies and objective, nonpartisan healthcare research foundations, found the ACA is integral to small businesses and their employees. In fact, more than 5.7 million small business employees or self-employed workers are enrolled in the ACA marketplaces, and more than half of all ACA marketplace enrollees nationwide are small business owners, self-employed individuals or small business employees.

The report also found the ACA has been a game changer for small business employees and self-employed entrepreneurs, who were disproportionately uninsured before the law went into effect. In 2013, more than 28 percent of small business employees were uninsured, while nearly 3 in 10 self-employed entrepreneurs were uninsured. By 2017, however, only 19.4 percent of small business employees were uninsured, and as of 2016 the uninsured rate for solo entrepreneurs fell by 35 percent.

In addition to decreasing the uninsured rates through marketplace enrollment and Medicaid, many small businesses offering health insurance coverage have seen their premium increases stabilize under the ACA. Since 2010, the increase in small business healthcare premiums has been at the lowest level in years, following regular double-digit increases prior to the law’s enactment. In fact, between 2011 and 2015, the average yearly premium increase in the small group market dropped by half, according to the Centers for Medicare and Medicaid Services.

“Thanks to the Affordable Care Act, the annual premium increases on my plan have been minimal,” said Ron Nelsen, owner of Pioneer Overhead Door in Las Vegas and a member of Small Business Majority’s Small Business Council. “As a result, I haven’t had to pass cost increases onto my employees, who in turn don’t need to worry about whether or not they can pay for healthcare. That certainty relieves a lot of anxiety.”

As noted above, many self-employed individuals and small business employees gained access to healthcare because of expanded eligibility for Medicaid under the ACA. According to the U.S. Census Bureau, there was roughly a 50 percent increase in the number of small business employees (those working at firms with fewer than 99 employees) enrolled in Medicaid between 2013 and 2016.

“We’ve been saying for years that small businesses don’t want or need another healthcare overhaul, and these numbers show why that is the case,” said Small Business Majority Founder & CEO John Arensmeyer. “The ACA has provided the quality, affordable health coverage small firms need for themselves and their employees so they can focus on running their businesses. Let this be a lesson to lawmakers who are still driven to end the ACA and are thinking about renewing the push to replace the law with a sub-par alternative.”

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About Small Business Majority

Small Business Majority was founded and is run by small business owners to ensure America’s entrepreneurs are a key part of a thriving and inclusive economy. We actively engage our network of more than 58,000 small business owners in support of public policy solutions and deliver information and resources to entrepreneurs that promote small business growth. Our extensive scientific polling, focus groups and economic research help us educate and inform policymakers, the media and other stakeholders about key issues impacting small businesses and freelancers. Learn more about us on our website and follow us on Twitter, Facebook and Instagram.

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