In the absence of Federal action on affordable health insurance for small businesses, states are continuing to look at options for their citizens. Missouri is the latest, with a proposal that would use Missouri’s state employee health care agency to administer a private insurance option for small businesses, and then use government money, potentially from the Medicaid program, to subsidize the premiums of lower-income employees.

Missouri’s plan would apply to businesses with no more 50 than employees that have not provided health insurance for at least one year. It’s estimated that over 300,000 people – almost half of Missouri’s total small business employees – work at a firm that does not offer health insurance and has not done so in the recent past.

Arkansas is beginning a similar program in January for business with 500 or fewer employees that have not offered an employee health plan for at least one year. Premiums in the insurance plan will be partly subsidized through Medicaid and that state’s tobacco settlement revenues.

Missouri’s estimated cost for the program would be $20 million. Some of that state money likely would be redirected from what’s currently paid to hospitals to reimburse them for the cost of treating the uninsured. The Missouri Hospital Association has been involved in developing the plan. It views the program as a way to reduce the number of uninsured people showing up at emergency rooms.

The hospital association’s interest was sparked by two trends: a declining number of employers offering health insurance and a rising number of workers declining coverage, in both cases because of costs, said Dwight Fine, the organization’s senior vice president for governmental relations.

If those trends continue, “we’re going to have such a large pool of uninsured that the system really begins to collapse,” Fine said.