Encouraging Signs about Small Employer and Worker Insurance Rates Under the ACA

Workers in jobs with historically low insurance rates have experienced an increase in insurance coverage under the Affordable Care Act (ACA), according to a study recently published by the Urban Institute based on funding from the Robert Wood Johnson Foundation (RWJF). A second study by the Commonwealth Fund shows that the small group health insurance market has remained stable under the ACA.

“Considered together, these two studies show that the ACA has played a key role in expanding access to high quality insurance for workers and employers in small businesses, which provide the majority of U.S. jobs,” says Janet Heinrich, DrPH, RN, FAAN, a research professor at the George Washington University Milken Institute School of Public Health.  In 2017, United States businesses with 499 or fewer employees provided employment to 58.9 million people, or 47.5% of the private workforce, according to the U.S. Small Business Administration.

The Urban Institute/RWJF study, How Have Workers Fared Under the ACA?, found that workers in historically low-insurance rate jobs experienced an increase in insurance coverage. In 2016, 11 million more workers had coverage than would be the case without the ACA, according to the study’s authors, Anuj Gangopadhyaya, Bowen Garrett, and Stan Dorn, who used data from the American Community Survey and Current Population Survey.

“From 2010 to 2016, workers’ coverage rates increased from 81.6 percent to 89.4 percent, the largest gains occurring among occupations with the lowest coverage rates in 2010,” the report states. Among employees earning less than $15 per hour (jobs in food preparation and service; farming, forestry, and fisheries; building and grounds maintenance; personal care; health care support; and transportation and material moving), employer-sponsored insurance coverage increased by 6.8 percent. During the same time period, non-employer-sponsored insurance coverage increased by 71.1 percent.

“Many employees of small companies have elected to purchase individual insurance under the ACA or qualify for Medicaid in states that expanded its availability,” Heinrich explains. “There is tremendous concern that recent Trump regulations will destabilize this market. New rules allow states to approve ‘association health plans’ or plans that don’t guarantee coverage of pre-existing conditions.  These ‘skinny’ plans do not comply with ACA rules that provide for consumer protections,” she says.

The second report, The Health of the Small-Group Insurance Market, stands out for providing a window into the health of the small group insurance market, which has not been the subject of a great deal of study. The report by the Commonwealth Fund focuses on insurance for businesses with fewer than 50 people, and its authors say the federal data they analyzed shows that the small-group market’s financial condition is not fundamentally better or worse than it was prior to when the ACA’s market reforms were fully implemented in 2014.

The report relies on data from the Center for Consumer Information and Insurance Oversight of the Centers for Medicare and Medicaid Services.

“This analysis shows that the small group health insurance market has remained relatively stable under the ACA. There is tremendous concern that recent Trump regulations will destabilize this market,” Heinrich says. “Overall, both analyses show that there has been an increase in insurance coverage of small-business employees.  The Trump rules may result in lower enrollments and increased premiums of approved ACA plans which will disrupt the market,” she predicts.

The Commonwealth Fund report’s authors, Mark A. Hall of Wake Forest University School of Law and Michael J. McCue of Virginia Commonwealth University School of Allied Health Professions, agree. “We must continue to assess whether these or other destabilizing threats can cause real damage to the small-group market,” they state in their report.