SPG synthesis report - State Coverage Initiatives

Many uninsured workers are employed at small businesses that are less likely to offer
health benefits. North Carolina found that more than half of its uninsured workers
(52.8 percent) work for small businesses with fewer than 25 employees. This issue is
of particular concern in those states where small employers make up a sizeable
proportion of the employer base. In Indiana, for example, small employers with fewer
than 50 workers represent nearly half of all Indiana businesses. In Maine, 38 percent
of employees in very small businesses with 10 or fewer workers were uninsured at
least part of the year for which the state conducted a household survey. And New
Mexico’s economy is based largely on retail, construction, tourism, and small service
businesses—industries that often lack health care coverage. As a result, New Mexico
has a high uninsured rate of 21.0 percent compared to a nationally average of 15.3
percent (Table 2-2).
• Persistent access barriers in rural areas. Several states reported persistent barriers
in improving access to rural health care services, including lack of providers,
geographic isolation, and poor hospital solvency. In Arizona, the Statewide Health
Care Insurance Plan Task Force expressed concern about the impact of workforce
shortages on that state’s “already fragile rural health care infrastructure and the
affordability and accessibility of coverage options for rural residents—a group
considered to be at increased risk for higher rates of uninsurance compared to their
urban counterparts.” 4
• Growth in self-insured employers. Across the board, states reported an increase in
the number of employers who are choosing to self insure rather than purchase fullyinsured
coverage options from health plans. These employers gain an exemption from
requirements related to ERISA, the Employment Retirement Income Security Act of
1974, allowing them more flexibility in plan design. 5 In general, this continues to be a
challenging issue for states as they work towards designing coverage and financing
options aimed at small employers.
• Changing political climate. The election cycle has always been a pervasive
influence on the policymaking process in states. Not surprisingly, several states
experienced significant changes on the political front in the form of new leadership in
the Governor’s mansion and new faces in the state legislature. These changes played
a significant role in shaping the policy options that these states could pursue with the
assistance of the SPG program.
Grantees carefully examined other states’ experiences (and even other countries’
experiences) with coverage expansion and this information played an important role in
states’ deliberations regarding health care coverage.
Arizona, for example, commissioned a paper by Milliman USA, Inc. to examine other
states’ experiences in establishing purchasing pools for small-employee groups, and for
individuals and families. 6 The paper explored the challenges faced by these pools and
their effectiveness in improving access and affordability to health insurance. From this
study, Arizona learned that historically purchasing pools have faced a number of
18