Almost 1 in 5 small business owners and self-employed workers ages 21-64 rely on Affordable Care Act Marketplaces for coverage
WASHINGTON – Today, the U.S. Department of the Treasury released new analysis showing a total of 3.3 million small business owners and self-employed workers were covered by Affordable Care Act Marketplace coverage in 2022, amounting to 28% of all Marketplace enrollment in this age range.
The Affordable Care Act Marketplaces are a disproportionately important source of coverage for small business owners and self-employed workers. In 2022, nearly one in five (18%) of small business owners and self-employed workers ages 21-64 relied on the Affordable Care Act Marketplaces for coverage. That compares to 6% of the rest of the population ages 21-64.
The 3.3 million small business owners and self-employed workers enrolled in the Marketplaces includes 2.7 million small business owners ages 21-64 and 1.7 million self-employed workers ages 21-64, with some overlap between these groups. Because overall Marketplace enrollment has grown since 2022, if small business owners and self-employed workers account for the same share of enrollment in 2024, 4.2 million small business owners and self-employed workers would have coverage.
“The Affordable Care Act has been transformative for millions of small business owners and entrepreneurs who rely on the law for affordable and reliable health care coverage, including 3.3 million in 2022. The Affordable Care Act allows Americans with dreams of starting their own businesses to pursue new opportunities without fear of being unable to access or afford health insurance, creating a more dynamic and productive economy over the long run,” said U.S. Secretary of the Treasury Janet L. Yellen. “Marketplace enrollment has surged under the Biden-Harris Administration's economic policies, which have made premiums far more affordable for American small businesses and entrepreneurs.”
“It is no coincidence that the Biden-Harris Administration has seen a historic Small Business Boom alongside a surge in Marketplace enrollment among small business owners,” said SBA Administrator Isabel Casillas Guzman. “With 19.4 million new business applications since the President took office, millions of entrepreneurs continue to rely on the Affordable Care Act for health insurance in order to pursue their American dream of business ownership.”
Before the Affordable Care Act was enacted in 2010, small business owners and self-employed workers had limited options to purchase affordable, high-quality health coverage. While most Americans obtained health insurance through their jobs, small business owners and self-employed workers often needed to purchase health insurance on their own, in which case quality coverage was expensive and sometimes denied.
The new data confirms that the Marketplaces are a particularly important source of affordable coverage for small business owners and self-employed workers, and the Biden-Harris Administration’s improvements to Affordable Care Act Premium Tax Credits are critically important to this group as well.
The American Rescue Plan Act of 2021 and the Inflation Reduction Act of 2022 enhanced the Premium Tax Credit available to people purchasing coverage through the Marketplaces by increasing the size of the credit for low- and moderate-income people and expanding eligibility to middle-income people facing high premiums. Over 2.7 million, or 82%, of small business owners and self-employed workers enrolled in Marketplace coverage in 2022 claimed the Premium Tax Credit, including about 285,000 taxpayers with incomes over 400% of the poverty level. Premium Tax Credit improvements are scheduled to expire at the end of 2025, putting affordable coverage at risk for millions of small business owners and self-employed workers.
Today’s news comes after the recent release of data showing that nearly 50 million Americans, or 1 in 7 U.S. residents, have been covered through the Marketplaces since January 2014. Under the Biden-Harris Administration, which has improved the affordability of Marketplace coverage by expanding the Premium Tax Credit, the number of Americans covered through the Marketplaces has significantly increased, reaching an all-time high of 20.8 million following open enrollment for 2024. 18.2 million Americans have enrolled for the first time since January 2021.
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