Healthcare in America is an expensive, stressful proposition. For Black business owners, it can be even worse.
The recently released QuickBooks Black Business Health Survey—conducted with 4,000 business owners, employees, and self-employed people nationwide—showed that Black business owners face greater financial challenges and more financial barriers to healthcare than others.
More than one-quarter (27%) of Black business owners surveyed described the current financial health of their business as “poor” or “terrible,” according to Simon Worsfold, senior data communications manager for QuickBooks at Intuit. In contrast, just 11% of other business owners rated their financial health as badly.
The pandemic is partly to blame; 42% of Black respondents said the pandemic negatively affected their finances and more than half said they plan to prioritize their financial health this year.
Healthcare costs are a key factor in overall financial health—or lack thereof. On financial aspects of healthcare, including insurance coverage and medical debt, Black respondents fared worse than others in the survey.
Nearly one-quarter (24%) of Black respondents reported being uninsured, compared to 13% of other respondents. Another 24% reported being underinsured, or having insufficient coverage, compared to 18% of other respondents.
Nationally, 12.5% of adults under age 65 were uninsured in 2020 and 43% were underinsured, according to the Commonwealth Fund.
Eric Woodson, founder and CEO of The Kool Source, a digital marketing firm based in Atlanta, believes health insurance barriers are affecting Black and white small business owners alike, especially during the pandemic when he says rates increased 10% to 20%.
“Most small businesses are less than 10 employees, making the ability to provide quality and affordable healthcare challenging,” Woodson said. “In order for small businesses to see a cost savings with healthcare and to qualify for better plans, you have to get your team over the 10-member mark. I honestly think this is an issue for any small business owner in this space.”
Woodson tapped into a benefits broker to help shop around for plans and signed up for one ahead of the renewal date to avoid price hikes.
Strategies like Woodson’s might save business owners money and improve access to better benefits, but they won’t fully address racial disparities in access to and quality of care, like those reported in the survey.
Black respondents were more than twice as likely than others—12% compared to 5%—to say their access to care is “terrible.”
Racial disparities in access to care and health outcomes are well documented. According to the Kaiser Family Foundation, Black Americans fare worse than white Americans on 44 health measures, more than any other racial or ethnic group.
These health disparities are intertwined with financial disparities, creating extra challenges for black business owners.
“We know it’s important for business owners to prioritize their own personal health and well-being because both are foundational to long-term, sustainable business growth,” Worsfold said.
But it’s hard to build financial health when healthcare costs drag you into a medical debt.
Approximately 40% of Black survey respondents reported having medical debt, which is on par or slightly better than other surveys that show half of Americans carry medical debt.
Having medical debt is bad enough, but how much debt people have—and how they feel about it—makes matters worse. On average, Black survey respondents reported having $18,000 in medical debt, substantially higher than national estimates.
That debt doesn’t seem to be going anywhere.
More than one-third (37%) of Black respondents think they won’t be able to pay off their medical debt in their lifetime, including 20% who say they think it is very unlikely they’ll ever be able to pay off their debts.
“Medical debt and the lack of health coverage can significantly impact the overall well-being of business owners, particularly Black business owners, who have already been disproportionately affected by the pandemic,” Worsfold said.
Despite worse access to healthcare and health coverage, Black respondents were more likely than other respondents to report excellent physical, mental, and social well-being. For example, 27% of Black respondents said their physical well-being is excellent and 30% rate their mental well-being as excellent, compared with 21% and 23% of other respondents, respectively. Another 29% of Black respondents said their well-being at work is excellent, compared to 24% of other respondents.
Despite these high notes, Worsfold says more needs to be done to support business owners of color.
“Small businesses are a vital part of our economy in the US And while the pandemic has impacted many small businesses, data shows that those owned by people of color have been disproportionately impacted,” he said. “Providing these businesses with the resources they need to achieve financial security is critical to ensuring their success.”