Blue Cross And Blue Shield Companies Working With States To Expand Healthcare Coverage For America's Small Businesses

Capitol Hill briefing highlights success of Oklahoma, Arizona initiatives

September 22, 2008

Watch the BCBSA Capitol Hill Briefing

WASHINGTON – Innovative solutions from Blue Cross and Blue Shield companies and state governments – including premium subsidy programs in Arizona and Oklahoma – are helping to expand coverage for workers at small businesses and are central to addressing one of the key challenges facing the healthcare system, as highlighted at a Capitol Hill briefing conducted this morning by the Blue Cross and Blue Shield Association (BCBSA).

"Innovative solutions such as programs in Arizona and Oklahoma have increased access for thousands of workers in small firms who otherwise would not be able to afford coverage," said Scott P. Serota, BCBSA president and CEO.  "Small businesses and their workers are the backbone of our nation's economy and addressing their needs must be a top priority for healthcare reform."

BCBSA today released new data from a survey of 400 small employers participating in the Insure Oklahoma program.  The survey found that 56 percent of all Insure Oklahoma enrollees were previously uninsured.  Insure Oklahoma helped some firms offer coverage for the first time – 37 percent of the program's employers were uninsured previously and 85 percent of these employers said the primary reason they couldn't offer coverage before was their employees couldn't afford it.

The program also helped employees that previously had access to employer coverage but could not afford it.  In firms that offered coverage prior to the program, 36 percent of their enrollees had been uninsured before Insure Oklahoma.  The program, which has broad support from insurers, small employers, hospitals and doctors, has enabled 55 percent of small employers with less than five employees to offer coverage for the first time.

The Insure Oklahoma program is an employer-sponsored insurance program that provides premium assistance to small employers with low-wage workers.  It has been highly successful in decreasing the uninsured in the small group market and currently provides coverage to almost 10,000 employees.  The survey also found that all workers – not just those with state subsidies – benefit when small firms offer coverage for the first time.  Of employers that did not previously offer coverage, for every five Insure Oklahoma – subsidized employees there are seven employees that don't receive a state subsidy but are now offered employer coverage for the first time.

Bert Marshall, president of Blue Cross and Blue Shield of Oklahoma, a division of Health Care Service Corporation, gave an overview of the survey findings and noted, "Seventy-three percent of small employers said that Insure Oklahoma helped them offer coverage by making it more affordable.  The program has grown significantly since its inception and 90 percent of employers credit Insure Oklahoma as one of the most, or the most, important factors in their decision to offer coverage."

Dr. Donald Russell, who owns Sooner Veterinary Hospital in Norman, Oklahoma, is a small business owner typical of employers helped by the program.  "I've been in business for nearly 30 years and this is the first time I've been able to offer coverage to my employees," he said.  "It's an important issue to me because I care about my employees' well-being.  The cost to employees was just too prohibitive before; with this program I can finally offer affordable coverage to my employees."

Another innovative solution to help small employers is a premium subsidy program available in Arizona.  Chuck Bassett, vice president for government relations and public policy, Blue Cross Blue Shield of Arizona, gave an overview of the program which helps make coverage more affordable for uninsured small employers.

"What started as an experiment has grown to become a successful program with more than 4,700 people who now have health coverage today," said Bassett.  "Employers are looking for ways to help them offer affordable coverage for their employees.  While this program is small by Washington standards, it serves an important role as an example of how creative public-private partnerships can work to solve problems."

At the briefing, Paul Fronstin, Ph.D., director, health research and education program, Employee Benefit Research Institute (EBRI) discussed trends in insurance coverage specific to the small group market and shared data from a recent EBRI survey.  "Traditionally small employers have had a difficult time offering coverage due to affordability for both the employer and the employee.  In a 2002 survey, 61 percent of employers reported they did not offer coverage because they did not think their employees could afford it," he said.  "What we're seeing are creative state-based solutions that enable employers to offer affordable coverage for workers who have traditionally gone uninsured."

As the debate on how best to expand access to healthcare coverage intensifies, BCBSA's briefing is very timely in focusing on the needs of small employers.  According to the Kaiser Family Foundation, offer rates among most employers remain high:  99 percent of firms having 200 workers or more offer coverage; 94 percent of firms size 50-199 and 83 percent of firms size 25-49.  The real drop-off occurs in the very small firms with less than 10 employees where only 45 percent offer coverage today.  Low-wage workers in these firms are hit especially hard, resulting in those with the greatest needs having the least access to affordable healthcare.

These solutions are just some of the private-public coverage solutions currently underway across the country.  Earlier this year, BCBSA released a five-point plan for healthcare reform, "The Pathway to Covering America:  Ensuring Quality, Value, and Access," which calls for health insurance coverage for every American and provides specific proposals for improving quality throughout the system.  This Capitol Hill forum explored the fifth recommendation of the Blues' reform plan on "fostering public-private coverage solutions."  As part of this initiative, BCBSA is advocating a federal tax credit for small employers with low wage workers that would operate similarly to the Insure Oklahoma program.  The proposal can be found on the BCBSA Web site at: bcbs.com/pathways.