Small Business Majority

Small businesses and sole proprietors employ more than half of New York State’s private labor force, but pay higher health insurance premiums than large firms.

These higher premiums contribute to fewer small businesses offering health insurance to their employees. In New York State, three-quarters of the uninsured are workers or their dependents. These individuals typically work for small firms that do not offer health insurance, but earn too much to qualify for Medicaid or other public programs. With support from Blue Cross of California, Small Business Majority (SBM) analyzed the impact of emerging health care reform options on small businesses across the country and in California. In December 2008, NYHealth awarded SBM a grant to build on this study by examining how specific policy options would affect small businesses in New York.

SBM is conducting a national study of the financial impact of various health reform proposals on small businesses. This project will leverage a national study funded by the Blue Shield of California Foundation and expand it to assess the potential impact of various returns on New York State’s small businesses resulting from various options. Returns analyzed include the status quo, a public-private partnership plan such as the one Massachusetts adopted, and a market-based plan. The analysis will address key issues such as the number of small business jobs that would be lost or gained, and what the impact would be on wages of employees working for small firms.

The project advisory board includes some of the nation’s top health economists. The modeling work will be conducted by Dr. Jonathan Gruber, Professor of Economics at the Massachusetts Institute of Technology, under subcontract to SBM. Dr. Gruber is well known for his work on estimating the impact of health insurance reforms. His extensive micro-simulation modeling for the Commonwealth of Massachusetts served as the basis for reforms enacted there. Dr. Sherry Glied, Professor and Chair of the Department of Health Policy and Management of Columbia University’s Mailman School of Public Health, will inform the project with locally based knowledge of the State’s health care environment and economy. A robust communications program will disseminate the findings of this study to key audiences, including the New York business community, policymakers, media, and consumer associations.