Summary Many small businesses cannot afford to provide health insurance to their employees. Their premiums are higher than those for large businesses, and a few sick employees can force a business out of the health insurance market entirely.
Individuals trying to purchase insurance for themselves also face high premiums.
Federal law makes it difficult for states to encourage small businesses to provide insurance and to help individuals to obtain it. Texas should appoint a task force to identify changes in federal laws and regulations that could help more small businesses and individuals obtain health coverage. By contrast, about two-thirds of employees in firms with more than 500 employees had coverage. In 1993, only 10.6 percent of Texas' small businesses purchased employee health insurance, but by 1998, that share had risen to 23.5 percent. Even so, more than three-fourths of Texas small employers still do not buy employee health insurance.