Congressional Briefing - April 4, 2008

Better Understanding the Health Insurance Issues that Small Firms Face

Small Business health insurance


Dr. Susan M. Gates and Dr. Christine Eibner


Friday, April 4, 2008


11:00 am – Noon


304 Cannon House Office Building
Washington, D.C.

About the Program

For generations, Americans have relied on their employers to provide them with health insurance. But as health care costs have escalated over the years, providing health insurance has become more of a concern for employers, especially for small businesses. Small U.S. firms have had more limited access to health insurance, with less than 50 percent offering health insurance, compared to more than 90 percent of large firms.

Dr. Susan M. Gates and Dr. Christine Eibner have examined how much of a burden it is for small firms to provide health insurance and how some of the proposed solutions are faring. They will present findings from this new, exciting research including:

  • The economic burden of providing insurance has increased for all employers, but particularly for the smallest firms, which spend nearly 11 percent of payroll on health insurance;
  • Despite increases in cost, health insurance offer rates have remained relatively stable, suggesting that for now, firms and their employees were willing to shoulder the burden of rising health insurance costs; and
  • Small firms offered plans that were of slightly lower quality and when health insurance plans are offered to small businesses, the plans suffered from limitations of coverage.

Drs. Gates and Eibner will further examine current policy solutions and their effects on small businesses. One policy solution analyzed is the increased regulation of the insurance plans offered to small firms on the state level, including the unintended consequences of these mandates. The second policy solution analyzed is the promotion of consumer-directed health plans, such as plans combining high deductibles with health savings accounts, and the need to better understand this market-driven policy.

The research being presented was conducted through the Kauffman-RAND Institute for Entrepreneurship Public Policy.

About the Speakers

Dr. Susan M. Gates

Susan M. Gates, Ph.D., is a Senior Economist and RAND specializing in the economics of organizations, political economy, and applications of economic management principles to public sector organizations, with a special interest in public sector leadership and entrepreneurship. She is the Director of Kauffman-RAND Institute for Entrepreneurship Public Policy in the RAND Institute for Civil Justice.

Dr. Christine Eibner

Christine Eibner, PhD, is an Associate Economist at RAND, where she conducts research on health economics, substance abuse, and military medical policy. Dr. Eibner’s current research addresses the availability and affordability of private health insurance, the relationship between neighborhood characteristics and coronary heart disease, the cost of deployment-related mental health conditions, and the economic costs of illicit drug use.

RAND Office of Congressional Relations

For 60 years, RAND has provided policymakers with independent, objective research and analysis on key national security, domestic and international issues. RAND work helps members of Congress and their staffs make better-informed decisions on the nation's pressing challenges. The Office of Congressional Relations offers a number of products and services to educate, inform, and facilitate congressional policymakers' access to RAND work, including coordinating congressional testimony by RAND experts, organizing briefings and meetings, synthesizing RAND work into topical e-newsletters and providing reports and publications to congressional offices. For more information, visit the Office of Congressional Relations webpage, contact or call (703) 413-1100 x5395.

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Further Inquiries

For further information about this event, contact the Office of Congressional Relations at or call (703) 413-1100 x5395.