Brooklyn's Progress
April/May 2006

On Mar. 29, Brooklyn Chamber of Commerce President Kenneth Adams appeared before the New York City Council's Small Business Committee and Health Committee about small business health insurance.  Following is his testimony:

Good afternoon.  I am Kenneth Adams, president of the Brooklyn Chamber of Commerce.  Thank you for this opportunity to speak before both of your committees on the critical subject of small business health insurance.

Before health care experts, elected officials, editorial page writers and business leaders officially declared the “crisis of the uninsured,” in Brooklyn, at least, small business owners had already taken action.  Faced with premiums they could no longer afford, they dropped their health insurance plans, sent their workers into the public health system and complained to us that the rising cost of health insurance was the biggest impediment to their success.  Worse, they claimed, than high taxes, expensive energy or exorbitant real estate costs.

The crisis of the uninsured is a huge problem in Brooklyn.  Our borough has more than 37,000 public and private sector employers that yield some 460,000 jobs.  And, as you know, it’s really a small business economy: 90% of Brooklyn workers labor in small firms with fewer than 20 people on the payroll. 

Based on data from the Kaiser Family Foundation, the Commonwealth Fund and MOHIA, we believe that there are more than 600,000 small business employees and their dependents in New York City without health insurance.  (This is a sub-set of a much larger group – in New York City today there are some 1,250,000 people without any health insurance at all.)

These workers (employed by about 78,000 small firms) make just enough money to not qualify for most government subsidized health plans, but not nearly enough to buy insurance themselves, and the boss just won’t pay for a traditional employer-sponsored plan any more.  It simply has become much too expensive. 

What’s more, most low-wage workers, when asked if they want their company to pay for costly health insurance, say “no thanks,” they would rather get a raise.  No surprise – given the high cost of living in New York City and the accessibility and quality of our public health care system where the uninsured seek care.

For the past six years, we have worked on a strategy to address the concerns of small business owners in Brooklyn that want to offer health insurance to their workers but cannot afford traditional plans – our initiative is called Brooklyn HealthWorks.

While others work on big, bold solutions like nationalized heath care and universal coverage, our Brooklyn-rooted practicality suggests that, in the meantime, we create a new, sustainable, low-cost health insurance plan for small businesses with low-wage workers whose costs are shared in a reasonable way by employer, employee, taxpayers and other funders.

To do this, the Brooklyn Chamber of Commerce partnered with Group Health, Inc. (GHI) and engaged New York State’s Healthy NY program and New York City’s HealthPass to create a unique, “public-private” insurance plan.  We used some taxpayers’ money (a grant from HRSA – the Health Resources Services Administration) to subsidize the HealthWorks premiums in a modest way.  Start-up grants from several foundations helped cover marketing and operations expenses. 

This partnership brings the HealthWorks price down to a level that allows small business owners and their workers to seriously consider, once again, buying health insurance.  A basic but attractive benefits package closes the deal.  The insured worker gets good health care coverage through an employer-sponsored GHI plan that is made affordable by a unique alignment of helpful partners. 

Brooklyn HealthWorks can easily be expanded citywide to an extent determined by the amount of funds dedicated to the premium subsidies.  (The current cost of the subsidy is $380 per person per year.)  This expansion will not be as expensive as it sounds, since generally it is more cost-effective for people to be insured (and receive preventive care) than for them to show up on the doorstep of the public hospital system.  Providing health care for more working New Yorkers by getting them commercial insurance this way should create savings that offset the cost of the premium subsidies.

Success has its price.  We exhausted both our premium subsidy and operating funds at the end of February, and new enrollment has been suspended as of March 1st.  Confident that our Brooklyn HealthWorks model works, we are currently seeking support from government partners to re-open enrollment in Brooklyn and possibly expand the initiative to other boroughs.

Thank you for your attention to this critical issue and for the opportunity to present this update on Brooklyn HealthWorks to you this afternoon.