Small business insurance exchanges seek rebound
Early enrollment for the health overhaul’s small business insurance exchanges fell far short of the 2 million workers who were expected to sign up this year. The shortfall calls into question the future of the exchanges as they begin accepting enrollment for 2015.
About 76,000 people had purchased coverage on 18 exchanges through June 1, according to a report released Thursday by the U.S. Government Accountability Office. Enrollment figures from 33 state exchanges that are run through the federal government are not yet available, but researchers expect those totals to be low as well.
“It’s still unclear whether or not these are going to take off in a substantial way, but we can’t assess that from where we are now,” said Linda Blumberg, an economist for the nonpartisan Urban Institute who has studied the exchanges.
The Small Business Health Options Program opened this year to companies with 50 employees or fewer. Its exchanges were expected to give more options and better prices to small businesses that can pay as much as 20 percent more for their coverage than larger companies.
But technology problems hampered their debut. Customers in many states found few coverage choices, and they got better deals outside the exchanges.
Government officials say they’ve worked to improve the exchanges, and both coverage choices and the pool of businesses that participate are expected to grow in the coming years.
“SHOP was created to give small business owners and employees access to a choice of quality, affordable health insurance plans,” Health and Human Services Department official Rhett Buttle said in an email.
The overhaul created insurance exchanges for both individuals and small businesses as part of its push to cover millions of uninsured people. The individual exchanges enrolled about 7 million people in their debut, which topped some initial projections.
The small business exchanges are designed to give companies a way to pool resources and get insurers to compete more for their business. But several of the state-based exchanges stumbled in their debut last fall when they were unable to get an online enrollment option functioning.
Many employers also never considered the exchanges because they renewed their insurance late last year. That meant their coverage carried over through most of this year, and they could delay some overhaul mandates and expected price increases that started with policies that began in 2014.
Some companies also skipped offering health insurance altogether and simply gave their employees money and sent them to the overhaul’s other exchange, which is designed for people buying insurance on their own, not through an employer.
Broker Ken Statz said he didn’t sign any businesses up for coverage through the exchange last year. He runs a small agency outside of Cleveland. Most of his clients renewed early or continued their old coverage.
He said the prices for what was offered on Ohio’s small business exchange weren’t competitive, and temporary tax credits that help some small business buy coverage may have to be beefed up.
Businesses did find benefits in other markets. In Washington, D.C., the small business exchange has enrolled about 1,300 people not counting Congressional employees.
“For us the numbers are great,” said Mila Kofman, the exchange’s executive director, noting that they focused largely on small businesses that had not offered coverage.
That exchange helped DC Brau Brewing offer more than 50 insurance options to its employees starting in September. That’s a leap from what it used to offer.
“It was literally two plans, and we weren’t even sure if it was what our employees needed,” said Mari Rodela, an executive with the microbrewery.
She said that, with the exchange, DC Brau could give younger employees who don’t use health care much a low-cost option and still provide more extensive coverage for other workers.
“It was nice to get ‘thank yous’ from your employees,” she said. “They like having the options.”
Congress is still trying to determine how well the exchanges worked, overall, in their first year, and the lack of enrollment data from so many states makes that impossible, according to Rep. Sam Graves, R-Mo, chairman of the House Small Business Committee.
“Small businesses and taxpayers deserve better,” said Graves, who requested the GAO report.
Federal officials have been working to improve the exchanges. Online enrollment options will debut in several states this month, as small business exchanges start accepting applications for 2015.
The websites also have added a portal that allows employers to designate a broker who then handles the details of their enrollment. That’s a key development because brokers are the traditional way small businesses find coverage.
Additionally, bigger companies will be allowed to participate in 2016, and state exchanges are expected to offer more coverage options by then as well.
Those factors are expected to help enrollment.
Aside from employers and brokers, the exchanges also will have to attract insurers who don’t save their best deals for products they sell off the exchanges, noted Kevin Lucia, a senior research fellow at the Georgetown University’s Health Policy Institute.
“It’s a whole new way of doing business,” he said. “All three players, it has to work for them or it’s going to be difficult.”