Washington, DC (PRWEB) April 16, 2015
Since the beginning of the year, the Department of Health and Human Services has offered regular enrollment updates for federally facilitated exchanges, but has been silent about the state of its Small Business Health Options Program (SHOP). Some industry observers contacted by Atlantic Information Services, Inc.’s (AIS) Inside Health Insurance Exchanges (HEX) wonder if SHOP will ever attract interest. For its April issue, HEX identified four key barriers that could have led to limited participation in SHOP.
(1) The small-business tax credit isn’t attractive enough. The maximum credit is available only to the smallest small businesses (10 or less) with lower average annual wages per worker ($25,000 or less), and without real financial incentives, private insurance exchanges will appear to be the better option.
(2) There’s a lack of employee choice when it comes to choosing a plan in SHOP. In most states with federally facilitated exchanges, employers aren’t given the choice to choose a plan on the program, due largely to calls for a delay from state regulators who worried that a poorly functioning employee choice program would lead to delayed payments to carriers, misinformation, consumer confusion and adverse selection, HEX says. Chris Condeluci, a principal at CC Law & Policy in Washington, D.C., who worked for the Senate Finance Committee during the crafting of the health reform law, told HEX that SHOP is “clunky” and “glitch-riddled.”
(3) SHOP faces competition from private exchanges. For most small businesses, private exchanges offer more options and better features, such as decision-support systems, education tools and end-to-end transactional services, Condeluci tells HEX. They also offer full employee choice for medical coverage, and offer ancillary products and services such as vision, dental, life, financial and payroll, increasing their attractiveness.
(4) Once employers have to give up their grandfathered, non-ACA compliant plans, enrollment on SHOP is expected to increase slightly, HEX says, but the majority of employers are expected to explore their options with a broker or move to a private exchange.
“The underlying market isn’t so broken that employers are crying out for a solution,” Rosemarie Day, president of Day Health Strategies and former chief operating officer of the Massachusetts exchange, told HEX. “What they want is dramatically lower premiums, and that’s not what SHOP offers.”
Condeluci worries that more tax dollars will be funneled into SHOP “until we come to the realization that we spent billions of dollars on SHOP, which was a failing exercise.”
Visit http://aishealth.com/archive/nhex0415-01 to read the article in its entirety, which also reviews some of the most successful state-based exchanges in Utah, California and New Mexico.
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Inside Health Insurance Exchanges provides hard-hitting news and strategies on public and private health insurance exchanges, written for business leaders with health plans, pharma companies, hospitals and health systems, brokers and agents, and exchange managers and vendors. The newsletter delivers reliable intelligence on this critical cornerstone of health reform — the players and their partners, product designs and enrollment results, employer perspectives and much more. Visit http://aishealth.com/marketplace/inside-health-insurance-exchanges for more information.
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