Small-busi­ness ex­changes off to rocky start

Modern Healthcare - - NEWS - By Paul Demko

Health in­sur­ance mar­ket­places for small businesses have largely been a bust in their first year of op­er­a­tions.

That’s in large part be­cause on­line en­roll­ment hasn’t been avail­able for businesses in the 32 states re­ly­ing on the federal Health­ web­site. In ad­di­tion, sev­eral state-based ex­changes, most no­tably Cov­ered Cal­i­for­nia, also have re­quired businesses to send in paper ap­pli­ca­tions to en­roll. That un­doubt­edly served as a de­ter­rent for com­pa­nies with fewer than 50 em­ploy­ees that might other­wise have con­sid­ered shop­ping for cov­er­age through the Small Busi­ness Health Op­tions Pro­gram (SHOP).

“It’s been a rocky be­gin­ning for sure,” said Linda Blum­berg, a se­nior fel­low at the Ur­ban In­sti­tute. “The at­ten­tion re­ally in the first year was fo­cused on the non-group por­tion of the mar­ket­place. As a re­sult, SHOP re­ally got a bit of the short end of the stick.”

Early re­newals were also a ma­jor fac­tor in lim­it­ing the num­ber of SHOP en­roll­ments in 2014. Many health plans en­cour­aged small businesses to re­new their cov­er­age just be­fore the mar­ket re­forms of the Pa­tient Pro­tec­tion and Af­ford­able Care Act went into ef­fect. By some es­ti­mates, roughly 70% of small-busi­ness groups opted for early re­newals, se­verely de­plet­ing the po­ten­tial mar­ket for SHOP ex­changes. The Obama ad­min­is­tra­tion’s de­ci­sion to al­low plans that don’t ad­here to the cov­er­age re­quire­ments of the federal health­care law to con­tinue for up to three years is ex­pected to fur­ther limit the num­ber of businesses ini­tially shop­ping for cov­er­age through the govern­ment-run mar­ket­places.

“In many, many states, be­cause the num­ber of early re­newals was so high, they likely didn’t even con­sider SHOP,” said Kevin Lu­cia, a re­search pro­fes­sor at Ge­orge­town Univer­sity Health Pol­icy In­sti­tute’s Cen­ter on Health In­sur­ance Re­forms.

Grant Lah­mann, na­tional out­reach di­rec­tor for Small Busi­ness Ma­jor­ity, a na­tional ad­vo­cacy group, said businesses of­ten opted for early

“The re­ally year was at­ten­tion in the fo­cused first on the non-group por­tion of the mar­ket­place. As a re­sult, SHOP re­ally got a bit of the short end of the stick.”


re­newals as their safest op­tion, given the tech­no­log­i­cal prob­lems the federal and state ex­changes ex­pe­ri­enced. “There was a lot of un­cer­tainty and mis­in­for­ma­tion in the busi­ness com­mu­nity, quite frankly, go­ing into 2014,” Lah­mann said.

De­ci­pher­ing ex­actly how many in­di­vid­u­als have ob­tained cov­er­age through the SHOP ex­changes is im­pos­si­ble. The CMS hasn’t re­leased any en­roll­ment data for the 32 states uti­liz­ing the federal ex­change. But some state-based, small-busi­ness mar­ket­places have re­leased their ini­tial fig­ures.

New York has signed up more than 4,000 businesses, cov­er­ing roughly 10,000 in­di­vid­u­als. As of April 1, Cal­i­for­nia had signed up roughly 1,200 businesses, with more than 8,000 cov­ered lives. And as of April 23, Colorado had signed up 220 businesses, cov­er­ing 1,860 in­di­vid­u­als. Un­like the mar­ket­place for in­di­vid­ual cov­er­age, en­roll­ment through the SHOP ex­changes continues year round.

Kelly Smith, di­rec­tor of New York State of Health’s Small Busi­ness Mar­ket­place, said her or­ga­ni­za­tion is work­ing closely with small­busi­ness as­so­ci­a­tions and in­sur­ance bro­kers to spread the word about avail­able cov­er­age op­tions. New York had 10 car­ri­ers of­fer plans through the small-busi­ness ex­changes in 2014, more than any other state, and Smith an­tic­i­pates that most will con­tinue to sell prod­ucts in 2015.

By con­trast, Wash­ing­ton state’s SHOP ex­change had only one health plan sell­ing prod­ucts in two coun­ties, Clark and Cowlitz, in 2014. Con­se­quently, just eight businesses have signed up for cov­er­age through the mar­ket­place.

Michael Marc­hand, di­rec­tor of com­mu­ni­ca­tions for the Wash­ing­ton Health Ben­e­fit Ex­change, said they hope to of­fer small-busi­ness in­sur­ance plans statewide in 2015. But Marc­hand also an­tic­i­pates that in­sur­ers will find the mar­ket­place more at­trac­tive in 2016, when com­pa­nies with up to 100 em­ploy­ees will be able to use the SHOP ex­changes.

Many pol­icy ex­perts see the need for in­sur­ance mar­ket­places for small businesses. That’s be­cause his­tor­i­cally, such com­pa­nies faced a tur­bu­lent mar­ket and of­ten paid higher prices to pro­vide cov­er­age to their em­ploy­ees.

The federal govern­ment an­tic­i­pates that on­line en­roll­ment will be avail­able for SHOP ex­change plans whose cov­er­age takes ef­fect in 2015. The CMS, the U.S. Small Busi­ness Ad­min­is­tra­tion and Small Busi­ness Ma­jor­ity are host­ing weekly webinars to pro­vide busi­ness own­ers with in­for­ma­tion about SHOP-ex­change cov­er­age op­tions.

In ad­di­tion, the Health­ site will give em­ploy­ers the op­tion of of­fer­ing their work­ers more choices for 2015 cov­er­age. That’s seen as a sig­nif­i­cant en­tice­ment for small businesses, since his­tor­i­cally, they have been able to of­fer their work­ers only one cov­er­age op­tion.

“That’s a ma­jor fea­ture that folks are very, very in­ter­ested in tak­ing a look at,” Lah­mann said.

But the CMS is al­low­ing states to opt out of of­fer­ing em­ploy­ees a choice in health plans if they are con­cerned that it could ad­versely af­fect the risk pool. In­sur­ance of­fi­cials in 18 states— in­clud­ing Illi­nois, North Carolina and Penn­syl­va­nia—have in­di­cated that they won’t al­low em­ploy­ers to of­fer more than one 2015 cov­er­age plan. That’s likely to make the mar­ket­place less at­trac­tive to small businesses.

“I think 2015 is still go­ing to be a chal­lenge,” Blum­berg said. “I’m hop­ing that we’re go­ing to see some strong suc­cess in at least a hand­ful of states that will demon­strate what can be done here.”

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.