The Affordable Care Act (ACA) marketplaces are a key source of coverage for small business owners and self-employed workers, filling gaps that limited affordable coverage options for these enrollees prior to the ACA.[1] The enhanced premium tax credits played an important role in further driving down their uninsured rates to record lows in 2023. According to tax return data from the U.S. Treasury Department, small business owners and self-employed workers are disproportionately likely to be enrolled in the marketplaces, consistently comprising about 1 in 4 marketplace enrollees as marketplace enrollment grew substantially in recent years.[2]
Since 2023, the most recent year of Treasury data, overall marketplace enrollment has grown even more.[3] We present state-level projections of enrollment among small business owners and self-employed workers for 2025, based on state-by-state growth in marketplace enrollment since 2023. Results show that roughly 5 million small business owners and self-employed workers will likely be enrolled in the marketplaces at some point during 2025. (See Table 1.)
But these gains could soon reverse. Marketplace open enrollment roughly doubled since 2021, when premium tax credit enhancements were implemented. If policymakers allow the enhancements to expire at the end of 2025, the Congressional Budget Office (CBO) estimates that 4.2 million people would become uninsured.[4]
CBO also estimates that the House reconciliation bill would lead to an additional 4 million people becoming uninsured due to marketplace cuts and 7.8 million people uninsured due to Medicaid cuts.[5] The so-called “Big Beautiful Bill” is anything but beautiful; these cuts would cause widespread harm by making it much harder for people to afford the high cost of health care.
Medicaid is a key source of coverage for small business owners and self-employed workers, with many gaining coverage through the Medicaid expansion group, which would bear a disproportionate share of the coverage losses under the bill. Millions of small business owners and self-employed workers would be among those losing coverage.
For each state, enrollment is projected from 2023 to 2025 by assuming that enrollment of small business owners and self-employed workers grows at the same rate as the state’s overall marketplace enrollment. Treasury data for 2023 represent the number of small business and self-employed workers ever enrolled during the year, with small business ownership and self-employment defined based on income and other tax data.[6]
Projections are uncertain, given substantial enrollment increases from 2023 to 2025. However, Treasury data for 2021-2023 show the share of marketplace enrollment composed of small business and self-employed workers was quite stable at a time when overall marketplace enrollment grew considerably over this period. Using the same methodology from 2021 to 2023 produced 2023 projections of small business owners and self-employed workers that are very close to actual 2023 enrollment, both at the state and national level. Further, analysis of American Community Survey data among self-employed workers by income level indicates ample room for future coverage gains.
