Women and portable health insurance

It is well known that women are starting their own businesses at record rates. "As of 2002, there are an estimated 6.2 million majority-owned, privately-held women-owned firms in the U.S., employing 9.2 million people and generating $1.15 trillion in sales," according to the Center for Women's Business Research.

But with the new businesses, come the challenges of keeping or getting health insurance for themselves and obtaining it for their employees.

Overall, small businesses with fewer than 50 workers account for 94.7 percent of businesses in the United States and employ more than 40 percent of the workforce.1 Forty percent of these small businesses do not offer health insurance coverage to their workers.2 A key reason is the high cost of health insurance and the fact that small firms lack the advantages of large companies in designing and purchasing affordable health care packages.

One-quarter of uninsured workers are self-employed.3 While Congress has enacted legislation that will provide full tax deductibility of health insurance for the self-employed as of next year, a tax deduction is worth only as much as the individual's tax bracket. If someone is in the 15 percent tax bracket, even full deductibility means just a 15 percent reduction in price. For many, this is simply not enough of a price break for them to afford coverage.

Minority women are starting their own businesses at an even faster pace than other women. Unfortunately, minorities are also disproportionately likely to be uninsured. Hispanics are more likely to be employed in blue collar jobs which are much less likely to provide health insurance coverage, but whatever their income, Hispanics are less likely to be offered job-based health coverage than non-Hispanic whites.4

Tax credits will help women small business owners because:


  • First, tax credits will allow women to choose the health plan that best suits their needs and the needs of their families.


  • Second, tax credits are portable. Because the subsidies for health insurance are not tied to the workplace, people can keep their health insurance even if they lose their jobs or don't have the option of job-based coverage. This will help women business owners in hiring and retaining talented workers.

    According to the U.S. Bureau of Labor Statistics, 13 million workers change their employment status in a typical month.5 On average, that means 13 million Americans leave home or school to enter the labor force, exit the labor force without looking for new work, find new work after a spell of unemployment or search for work after they quit or are dismissed or laid off — every month.

    Tax credits would provide these workers with more stability by giving them subsidies for health insurance that they could keep.


  • Third, women are smart shoppers – and savvy on-line researchers. This army of newly empowered consumers will inject renewed energy into the fragile market for privately purchased health insurance. Tax credits would improve the market for private health insurance by giving consumers and insurers an incentive to strengthen the market for private health insurance.


  • Fourth, the cost of the insurance would be visible, and consumers would be more motivated to shop for the best coverage for the money, reversing the current trend for workers with job-based coverage to demand more and more insurance coverage because the full cost of the policy and the services they consume is hidden from them.


  • But most importantly, tax credits tell these hardworking Americans who are left out of the current system that they count, too.

Tax credits for the purchase of private health insurance would provide today's uninsured workers and their families with financial help in purchasing coverage to begin to equalize the subsidies that employees with job-based insurance receive.


Excerpt of news release:

Women small business owners

Number of Women-Owned Businesses Expected To Reach 6.2 Million in 2002

Washington, DC – The number of women-owned businesses continues to grow at twice the rate of all U.S. firms, and those businesses show significantly greater increases in employment and revenues, according to a new report from Center for Women's Business Research (founded as the National Foundation for Women Business Owners). Between 1997 and 2002, the Center estimates that the number of majority-owned, privately-held women-owned firms will have grown by 14% (compared to 7% nationwide) and will stand at 6.2 million in 2002.

For more, go to www.nfwbo.org/Research/12-4-2001/12-4-2001.htm

What women want

In a survey that columnist Bob Herbert called "The most extensive analysis of women's views in this [2000] campaign season," conducted by Women's Voices found that "a large majority of women – 72 percent – would like their health insurance to be independent of their employment. This was not even one of the issues the pollsters had intended to ask about, but it came up repeatedly in the focus groups that preceded the polling. Politicians should take notice."

Bob Herbert, "Focus on Women," The New York Times, September 27, 2000.

(See attached article for more.)

An example:

Take the example of a woman who is working two jobs. She may be divorced. She may be a single mom with two kids. She is working; she is trying to provide for herself and her family. She has stretched time and resources absolutely to the limit. She is paying her taxes and working as hard as she possibly can, and she doesn't have health insurance. For her, employment-based health insurance is simply not available. She can try to buy health insurance on her own – with scarce after-tax dollars – or take the chance of going without.

Yet, this woman is paying taxes to subsidize health insurance so her boss can have a generous health benefit plan, and she doesn't have even minimal health insurance for herself and her children.

A taxpayer earning $100,000 a year or more gets an annual subsidy worth $2,638 while one earning $15,000 gets only $79 a year in assistance toward the purchase of health insurance.

Providing tax credits directly to women to purchase health insurance would begin to equalize this discrimination and provide women with new resources to purchase their own, portable health insurance coverage.

1 U.S. Bureau of the Census. 1998 County Business Pattern Data, Table 2.

2Larry Levitt et al., Employer Health Benefits: 1999 Annual Survey, Henry J. Kaiser Family Foundation and Health Research and Educational Trust, 1999.

3Duchon, et al. Listening to Workers. The Commonwealth Fund.

4 Claudia Schur and Jacob Feldman, Running in Place: How job characteristics, immigrant status, and family structure keep Hispanics Uninsured, The Commonwealth Fund. May 2001.

5 Michael M. Weinstein, "Economic Scene: Cream in Labor Market's Churn." The New York Times, July 22, 1999.


Turner is president of the Galen Institute, a research organization that studies health-care and medical issues.


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