Millions of Americans are caught in a coverage gap—earning too much to qualify for subsidies, but not enough to afford rising premiums. These individuals and small businesses face difficult choices between basic needs and health insurance. CareFirst BlueCross BlueShield (CareFirst) recently hosted a virtual thought leadership event The Disrupted Middle: Bridging the Coverage Gap for Small Employers and Consumers.
The discussion brought together healthcare policy and commercial market experts to explore solutions for the disrupted middle. Steve Jepson, Senior Vice President Commercial Markets at CareFirst, opened the event. Burcu Bozkurt, Director, Commercial Markets, moderated the panel, which featured:
- Lisa Campbell, Principal, Groom Law Group
- David Anderson, Assistant Professor, University of South Carolina
- Michael Rachesky, Regional Vice President, Corporate Synergies
Who is the Disrupted Middle?
This group includes self-employed individuals, gig workers, seasonal workers and small businesses often with 1–50 employees. In 2024, the U.S. had over 33 million small businesses—99.9% of all U.S. businesses—with over 80% operating as sole proprietors. These individuals form the backbone of the economy but often fall through the cracks of the health insurance system.
Middle-income consumers and small employers face rising premiums without access to premium assistance. As Lisa Campbell noted, when choosing between needs like housing, food, and health insurance, coverage often loses. Many in this group forgo insurance or seek alternative solutions.
Policy Risks Ahead
Unless Congress acts, the disrupted middle will grow. The enhanced advance premium tax credits (eAPTCs), established in 2021 and extended through 2025, are set to expire at the end of this year. These credits expand eligibility and increase subsidies under the Affordable Care Act. Dr. Anderson warned that without an extension, millions will lose coverage and face a massive price shock. The Congressional Budget Office estimates that the uninsured population will increase by 3.8 million people on average, each year over the 2026-2034 period, and that gross benchmark premiums will increase an average of 7.9% over that period.
Alternative Coverage Solutions
Panelists explored emerging solutions like Individual Coverage Health Reimbursement Arrangements (ICHRAs) and level-funded plans. Lisa noted that ICHRAs are increasingly becoming part of coverage conversations as they give employees a fixed amount to spend on coverage they buy directly in the individual market where they pick the plan that works best for them. Lisa also noted that for employers, ICHRAs offer increased flexibility from the one-size-fits-all approach of traditional coverage and eliminate the compliance burden. Similarly, level-funded plans are a self-insured option that offers predictability, flexible plan design, and risk mitigation through stop-loss insurance to protect against high-cost claims.
These solutions are gaining traction. In 2024, 37% of covered workers in small businesses were enrolled in level-funded plans—up from about 6% in 2018. From 2024 to 2025, adoption of ICHRAs by small employers grew by 18%.
A Call for Innovative Solutions
The panelists emphasized the need for intentional policy design and market guardrails to support innovation without sacrificing access. Mike urged carriers to look for new approaches to engage consumers in preventive and proactive care. There were also calls for streamlining enrollment through improved broker and navigator platforms and optimizing transparency tools to help consumers better understand costs.
This timely conversation spotlighted coverage gaps and practical solutions to make health insurance more affordable and accessible for the disrupted middle. If you missed the event, check out the full recording linked above. We hope you will join us in elevating the needs of these individuals and driving meaningful change.