The Hilltop Institute at UMBC has just released a new Issue Brief to disseminate the findings of the first formal evaluation of New Mexico’s State Coverage Insurance (SCI) program entitled Small Business Participation in the New Mexico State Coverage Insurance Program: Evaluation Results.* The purpose of the study was to identify factors that have influenced employer participation in SCI. The evaluation was partially funded by the Robert Wood Johnson Foundation’s State Health Access Reform Evaluation (SHARE) program through a partnership between the New Mexico Human Services Department (HSD) and The Hilltop Institute. Hilltop Senior Research Analyst Anna S. Sommers, PhD, was principal investigator for the project.
New Mexico’s SCI program is a public/private partnership that provides access to subsidized health insurance for uninsured adults aged 19 through 64 years with household incomes below 200 percent of the federal poverty level (FPL). It is a health care coverage option offered to low-income workers through small businesses and jointly financed by private (employer/employee) contributions and by public (state/federal) funding.
Researchers fielded two employer surveys in 2008 and conducted site visits to interview program stakeholders in July 2008 and May 2009 to derive the results of the evaluation.
The Issue Brief describes the characteristics of the businesses that participate in, or have inquired about, SCI; their experiences with SCI; concerns that they have about the administrative and cost burdens of sponsoring SCI; and their experience in offering health insurance to their employees.
The evaluation highlights several lessons from the implementation of the SCI program to date that are of interest not only to New Mexico, but also to other states that seek to increase small business participation in offering insurance to their low-income employees. Importantly, the program has attracted a diverse array of businesses to sponsor SCI enrollment for their workers. These employers represent a wide variety of industries and all regions of the state, which may be a testament to an effective broker recruitment and training program. Hilltop researchers found that small businesses were more concerned about the administrative burden of sponsoring SCI than the cost of sponsorship when deciding whether to participate in the program. Over two-thirds of participating and inquiring employers had concerns about administrative issues, which included difficulty understanding how eligibility requirements of the program applied to the business and its employees, and concern that the ongoing administration of the program would be complicated for the business.
Researchers also found that very small businesses (those with less than 5 employees) and businesses in urban areas were underrepresented in the study; thus, specially tailored outreach efforts or other provisions to enable their participation in such programs might be warranted.
Researchers concluded that because small businesses often cannot provide affordable private insurance options for their workers, engaging small businesses in programs such as the New Mexico SCI program as an alternative coverage solution continues to be a promising mechanism by which universal coverage might be achieved.
