Limiting ‘Junk Insurance’ in Illinois Will Protect ACA Marketplaces Small Businesses Rely On
Statement by Geraldine Sanchez Aglipay, Illinois Outreach Manager for Small Business Majority, on why small businesses will benefit from Illinois’ decision to curb the sale of short-term insurance plans
Illinois lawmakers stood up for the state’s entrepreneurs today by limiting the sale of short-term health insurance plans sold in Illinois to six months. This step was necessary in light of the Trump administration’s recent decision to allow short-term insurance plans to last up to 364 days. This change will undoubtedly pull many healthy people away from the Affordable Care Act (ACA) marketplaces, and that is very bad news for the small businesses, small business employees and solo entrepreneurs in Illinois that depend on the state marketplace for quality, affordable insurance.
Short-term health insurance is meant to fill a gap in an individual’s coverage in the instance of job loss or other life changes. These plans are inexpensive because they are not compliant with ACA requirements and not required to cover essential health benefits like prescription coverage or mental health treatment, and they can come with hefty deductibles. The Trump administration estimated as many as 1.6 million people will purchase short-term plans by 2022, and we expect many of them will be younger and/or healthier. This will create an unbalanced risk pool that disrupts the individual marketplaces and raises costs for everyone else who remains in those marketplaces.
If the administration’s prediction is accurate it would devastate small firms, including about 54,000 self-employed entrepreneurs and small business owners in Illinois who receive their health insurance through the state ACA marketplace. Without healthy people in the marketplace to offset the costs insurance companies incur to care for older or sicker people, premiums will rise drastically and many small businesses will be priced out of the market.
With so much damage being done in Washington to disrupt the healthcare marketplaces small businesses depend on, it’s critical that Illinois pursue policies that enable small business owners to access affordable, quality healthcare options. Today, our state lawmakers did just that.
About Small Business Majority
Small Business Majority was founded and is run by small business owners to ensure America’s entrepreneurs are a key part of a thriving and inclusive economy. We actively engage our network of more than 58,000 small business owners in support of public policy solutions and deliver information and resources to entrepreneurs that promote small business growth. Our extensive scientific polling, focus groups and economic research help us educate and inform policymakers, the media and other stakeholders about key issues impacting small businesses and freelancers. Learn more about us on our website and follow us on Twitter, Facebook and Instagram.