Small-business winners and losers under health care reform

C. G. McLaughlin, W. K. Zellers, K. D. Frick

Research output: Contribution to journalArticlepeer-review

Abstract

To meet its goal of universal health insurance coverage, the Clinton health plan requires all employers to offer health insurance to their employees. Using survey data on more than 2,200 small businesses, we estimate how many firms and employees would be affected by this mandate and calculate the financial burden, adjusting for the small-business subsidies recommended in the Clinton plan. Because of the payroll caps, almost 60 percent of small businesses that now offer insurance will experience a reduction in premiums. The average reduction is approximately $1,500 per full-time equivalent (FTE) per year. The majority of firms that offer insurance and face an increase in liability under the Clinton plan will incur an increase of less than $1,000 per FTE per year. Firms that do not now offer insurance will incur, on average, a liability of $500 to $900 per FTE.

Original languageEnglish (US)
Pages (from-to)221-233
Number of pages13
JournalHealth Affairs
Volume13
Issue number2
DOIs
StatePublished - 1994
Externally publishedYes

ASJC Scopus subject areas

  • Health Policy

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