The majority of small businesses in the United States do not have health insurance coverage for either their owners, or employees. The reason for the lack of coverage among small businesses is the high cost of insurance policies. Because small businesses do not purchase policies in volume, they lack the buying power of major corporations and are charged higher premiums for the same (or inferior) coverage.
Health insurance is a good idea even for healthy individuals, but for those with medical conditions it is critical to have at least major medical insurance coverage. In most cases, having some insurance is better than having none at all.
Group Purchasing Arrangements (GPAs)
GPAs help lower insurance premiums for small businesses by bringing multiple small groups together in order to achieve the buying power of a large group. The states that have mandated GPAs are:
- Arkansas
- Kansas
- Montana
- New York
- New Mexico
- Ohio
- Texas
- Wisconsin
If your state does not have a GPA, look for associations of employers or individuals, and other small business owners who have established GPAs.
High Risk Medical Pools
Thirty-eight states have state-run, or state-sponsored insurance programs called “High Risk Medical Pools” or “Major Medical Risk Insurance Pools.” For people who cannot get insurance through other avenues (usually due to a preexisting medical condition), state high risk medical pools usually guarantee coverage – for a price.
States that do not have medical pools are:
- Arizona
- District of Columbia
- Georgia
- Massachusetts
- Michigan
- Nevada
- New Jersey
- New York
- Pennsylvania
- Rhode Island
- Vermont, and
- Virginia
To find out about health insurance options in your state, contact the state’s insurance commission or your health and human services department.
Reinsurance
Reinsurance programs vary by state. Some states offer subsidies for health insurance to small business owners and the low-income population, others offer purchasing pools. Some reinsurance programs shift the cost of care for some enrollees to a third party that may include the state, a reinsurance pool, or reinsurance carrier.
If your state has a reinsurance program it is worth looking into. While options vary, all reinsurance programs are designed to help reduce the costs of insurance premiums.
States that have reinsurance programs are:
- Arizona
- Connecticut
- Idaho
- Massachusetts
- New Hampshire
- New Mexico, and
- New York
Although health insurance premiums are hard for most small business owners to afford, having coverage is worth it. If you have even one serious medical situation, a single day of hospital care could easily cost more than an entire year's worth of premiums.
