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Have Small-Group Health Insurance Purchasing Alliances Increased Coverage?

We use data from 1993 and 1997 employer surveys to assess whether the three largest statewide small-group health insurance purchasing alliances—in California, Connecticut, and Florida—increased coverage in small business. They did not. Specifically, they did not reduce small-group market health insurance premiums, premiums, and they did not raise small-business health insurance offer rates. We explore and discuss some reasons why. Alliances do permit employers to offer much greater choice in the number and types of plans; employees are found to take advantage of this wider choice.

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