Health Care + Small Business · 2011. 12. 31. · Introduction to Pacific Community Ventures Who we are – a non-profit and Community Development Financial Institution (with affiliated

Ben Thornley Meredith Willa

Pacific Community Ventures

California Health Benefit Exchange Board Meeting December 20, 2011

Health Care +

Small Business:

Understanding Health Care Decision Making in California

Agenda

About PCV

Report Methodology

General Findings

Focusing on the Exchange

Summary of Key Findings

Q&A

2

Introduction to

Pacific Community Ventures

Who we are – a non-profit and Community Development Financial

Institution (with affiliated for-profit investment fund) in San Francisco.

InSight– thought leadership practice at PCV undertaking policy

research, including in health care and small business development

All aimed at helping small businesses to grow

and create quality jobs in California.

3

Research Background & Methodology

Who: PCV and Lake Research Partners, funded by The California Endowment

What: To understand small business owner behavior and decision making in offering and purchasing health insurance benefits for their employees. We focused on small businesses with fewer than 20 employees.

How:

• Focus groups – Oakland, Fresno and San Diego

• Telephone Survey – 804 CA small businesses

• In-depth interviews /case studies

4

Small business in CA

Rodney, owner of Mt. Whitney Dairy Farm,

20 employees

Chris, co-founder of Gama-Go, a San

Francisco design & manufacturing

company with 12 employees Linda, owner of FinanceStaff, in

Oakland, 2 full-time employees

Haim, souvenir distributor, 4 full-

time employees

Melissa, secondary market retail,

10 employees

Tom, document

storage and retrieval,

11 employees

5

What does the market look like?

3.5 million Californians get their insurance through the small group market (almost 10% of state population)

~6 million Californians lack health insurance (approx. 16% of the state pop)

2 million+ of those lacking insurance live in a household headed by someone who works in a small business with fewer than 50 employees (5-6% of state population)

25 million insured by

large group market,

individual market,

MediCal, etc.

4 million uninsured,

Other

2 million uninsured,

small business

population

3.5 million insured by

small group

6 Pacific Community Ventures, 2011: Health Care + Small Business: Understanding Health Care Decision Making in California

Where are California’s small(est) businesses?

3%

22%

8%

26%

9%

9%

11%

7%

8%


Who owns CA’s smallest businesses?

18% 81%

FEMALE MALE

Male vs. Female

The proportion of female-

owned businesses is low

considering the makeup of

the state population.

Who Owns It?

The number of minority-

owned businesses is low,

relative to the makeup of

the state population.


What do CA’s smallest businesses do?

RETAIL/ MANUFACTURING/ NON-RETAIL OTHER

RESTAURANT INDUSTRY/ SERVICES 5%

21% AGRICULTURE 44%

29%

Industry

A plurality of California’s small

businesses are in the non-retail

service industry, such as small

recruitment or accounting firms.


Who are CA’s smallest business owners?

10

Political

Affiliation

A plurality of small

business owners

identify as

Republican.

Pacific Community Ventures, 2011: Health Care + Small Business: Understanding Health Care Decision Making in California

19% 55% 22%

Who are CA’s smallest business owners?

11

How Old?

A majority of small business owners

in California are between the ages

of 45 and 60.


Small Businesses: Current Behavior

61% of California businesses with 2-9 employees offer health

insurance; 78% of those with 10-19 employees offer coverage.

• Minority owners with 2-9 employees

are less likely to offer insurance

• Older owners more likely to offer

insurance

• 75% use a broker when purchasing

health insurance

As business size grows, so does owners’

likelihood of offering health benefits

Percentage of owners

offering insurance


Top Reasons to Offer Benefits (or Not)

Reason To Offer:

Recruitment and retention (42%)

Responsibility to do so (32%)

Reason To Not Offer:

Costs too much (71%)


Awareness of Affordable Care Act (ACA)

and the Exchange

Only 9% of small business

owners say they are “very aware”

of new Affordable Care Act

(ACA) provisions

62% have not yet heard of the

Exchange

57% are unfamiliar with tax

credits


Differences in Awareness, by Business

The smaller the business, the less likely they are to be aware of the Exchange (34 percent of owners with 2-9 employees are aware vs. 42 percent of owners with 10-19 employees)

Awareness is lower among minority business owners (33 percent vs. 39 percent of non-minority owners)

Awareness is higher in retail/restaurant businesses than in industry/manufacturing (44 percent vs. 30 percent)

Awareness is only slightly higher among those owners who use an insurance broker than those who do not (42 percent vs. 38 percent)


20%

25%

30%

35%

40%

45%

50%

LA County Orange InlandEmpire

San Diego CentralCoast

Fresno Sacramento Bay Area

Percent of Owners Aware of the Exchange, by Region

Wide Variation in Awareness by Region


High Interest in the Exchange After

Learning More

55% of all small businesses say they would be

likely to participate in the Exchange

60% of those who already offer

43% of those who don’t yet offer

Older owners are less likely than younger

owners to participate (47 percent of those aged 65 and

over vs. 62 percent of those under 45)

17

“If you hear

something often

enough, you say,

sure, I’ll try it”.

–Rodney, Mt.

Whitney Dairy

Farm


The Exchange and Benefit Provision

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

More likely toprovide in future

No effect on futureprovision

Less likely to providein future

CurrentOfferers

Current Non-Offerers

Most owners say the exchange will make them more likely to provide health benefits in the future, or will have no effect


Where will small business owners go for more info

on the Exchange?


12%

19%

19%

28%

21%

13%

24%

19%

8%

8%

12%

60%

0% 10% 20% 30% 40% 50% 60% 70%

State govt agency

Their/An accountant

An industry organization

Their/An insurance broker

Offerers, use broker

Offerers, no broker

Non-Offerers

What sources of information do small business

owners trust most?


0% 10% 20% 30% 40% 50% 60% 70% 80%

Insurance brokers

CA Dept of Managed Care

CA Dept of Insurance

Local chamber of commerce

US Dept of HHS

State chamber of commerce

Nonprofits

National small business orgs

CA small business orgs

Doctors and nurses

Tax accountants

Their insurance broker

Their tax accountant

Have a broker

Don't have a broker

The percentage of business owners who described having a

‘high level of trust’ in various sources of information

Future Purchases: Brokers + the Exchange


Future Purchases: Brokers + the Exchange

22

“I wouldn’t want to be paying for a broker if

I could get all of that information for free.”

-Chris

I’d use it in conjunction with my broker and

see how willing he is to work with it. I’d see

pretty fast how much he’s costing me.

- Rodney

“I don’t envision any kind of portal that

could provide the same service that a

broker can. I can gain a lot of information

from the portal, but then I would want to

talk to someone about it. I don’t want to

become an insurance agent.”

- Tom


Employee Choice in the Exchange

More attractive, 29%

Less attractive,

13%

About the same, 54%

We asked small business owners if an employee choice option in the Exchange would make it more attractive,

less attractive, or about the same. They told us:


Reduction in health care costs due to the pooling

of many small business buyers

Simplicity of the exchange process

Government involvement. Small businesses do not

want to see ‘.gov’ on the website

Spreading the Word: What Works?


Spreading the Word: What Works?

25

“It’s simple, I like the ratings, I like the

different tiers.”

-Linda

“If it is cheaper and easy to use, I

would consider using it.”

– Haim

“I don’t want to see .gov there.”

-Rodney

When shown a mock-up of the

Exchange, owners told us:


Key Findings

Awareness of the Exchange is low among CA small business owners; 62% have not

yet heard about the Exchange.

There is an important opportunity for outreach and education: when small business

owners hear about the Exchange, they are more likely to offer coverage in the future.

Most small business owners are likely to participate in the Exchange, once they learn

more.

Many small business owners will learn about the Exchange from insurance brokers.

Those who don’t use them may learn from accountants or industry organizations.

Messaging about the Exchange should highlight cost reduction and simplicity, and

downplay the role of government.


For more information, please visit: www.pacificcommunityventures.org/insight

27

http://www.pacificcommunityventures.org/insight

Documents

Health Care + Small Business · 2011. 12. 31. · Introduction to Pacific Community Ventures Who we are – a non-profit and Community Development Financial Institution (with affiliated