Changing Health Care Role for California’s Businesses?

It’s an alarming lead statistic in a report out this week: About 20% of working Californians don’t get health care insurance through their employer.

What that means is that it’s not just the unemployed and disabled who are struggling to find health care coverage. It’s also a large number of people with jobs.

But will any of that change under the pending national health care reform law? Businesses with fewer than 50 employees won’t be required to provide health insurance. So will state lawmakers need to enact some kind of legislation to address it?

Shana Alex Lavarreda, director of Health Insurance Studies at UCLA’s Center for Health Policy Research and lead author of the policy brief released this week, acknowledges that “pay-or-play” provisions in the Affordable Care Act only apply to businesses with 50 or more employees.

“However, that was due to the recognition that small businesses needed help in order to offer coverage to their employees,” Lavarreda said. “Our data simply underscore the extent to which employees of those firms lacked access to coverage, as of 2007.”

What is likely to make a big change under health reform, she said, is the small business tax break. In fact, she said, that’s already changing the health coverage dynamic in California, since it has been in effect for all of 2010, as a credit on the tax forms filled out in 2011.

“Data from the Kaiser Family Foundation Employer Health Benefits Survey has shown a 9 percentage point increase in the rate of offering coverage among small businesses in 2010,” Lavarreda said, “which strongly suggests that this tax credit is working and health insurance among small business employees is expanding.”

The opening of the state Benefits Exchange in 2014 will help the remaining small businesses to offer employee coverage, she said.

Until then, there is one more piece of the coverage puzzle that could fit for Californians, Lavarreda said. Last month, state and federal officials formalized the Medicaid waiver — and, she said, “that will allow childless adults with incomes up to 200% [of the poverty line] to enroll in Medi-Cal.”

So, of those adults who currently aren’t offered employer-based coverage,  nearly two-thirds of them will now have a public health insurance option.

“And that,” she said, “could have the potential to provide health insurance to those 3.7 million adults.”

For additional coverage of the UCLA policy brief, see Wednesday’s California Healthline article.

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