Small-Business Exchanges Draw Few Insurers

Obamacare’s new insurance marketplaces for small businesses, which have already stumbled before getting out of the gate, are facing another pressing question just months before millions can sign up for benefits: What happens if insurers don’t show up to sell?

Early looks at insurance offerings on the Obamacare exchanges show that insurers aren’t exactly signing up in droves to sell on the new Small Business Health Option Program exchanges. In some states, just one insurer has signed up for the SHOP exchanges, which are supposed to foster competition and make it easier for small businesses to purchase coverage. The SHOP exchanges exist alongside the exchanges for individuals, which have gotten more attention in preparation for the health law’s rollout.

Continue Reading The Obama administration is still trying to recruit insurers to states where there’s been little interest in exchanges. But some health law advocates believe administration health officials have put a greater emphasis on standing up the individual exchanges, where they hope premium tax credits will be a big draw for millions to sign up for coverage next year.

In many cases, they also see little incentive for SHOP exchanges in 2014. A limited tax credit for small businesses available only in the SHOP exchanges has so far received less interest than expected, and a key feature providing employees with more freedom to pick their health plan has been delayed in most states.

“I think the SHOP exchanges are basically a 2015 issue, but we will see how they work out in the states that are doing them, and they might turn out to be a bigger factor going forward,” said Tim Jost, a Washington and Lee University law professor and supporter of the health law.

That’s the hope in Washington state. Just one insurer will sell exchange plans to small businesses in 2014, even as nine signed up for the state’s individual exchange. So the Washington exchange is scaling back the SHOP rollout, making the program available in only some counties in the first year.

Exchange officials in the state insist that they were ready for a full SHOP launch in the first year, but they said insurers, facing limited time to prepare for these new markets, focused on scooping up customers in the individual market, which the exchange had projected would account for 98 percent of enrollment in 2014.

“While we were disappointed overall this first year, it was just tough for [insurers] from a timing standpoint to get everything geared up and ready to roll for Oct. 1,” said Michael Marchand, director of communications for the exchange. Already, several insurers have indicated their interest in joining the SHOP exchange for 2015, he said.

Just one insurer has also signed up to sell coverage in North Carolina’s federal-run small-business exchange in 2014, prompting concern from advocates in the state.

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WashPost Notes 'Small-Business Owners Dread' ObamaCare Tax; Paper Buries Story on A15

"Many small-business owners worry that a new tax on insurance providers in the health-care law will mean higher premiums for them, undermining the law's capacity to lower their health-care costs," Washington Post staff writer J.D. Harrison opened his 15-paragraph May 13 story, "Small-business owners dread impact of health insurance tax." The website headline was even starker: "Health insurance tax ‘scares the daylights’ out of some small-business owners."

Unfortunately for print edition, readers, Post editors buried this front-page-worthy article on page A15. Yes, today's front page was mostly populated with meaty, hard-news stories, but a large photo from last night's Capital-Rangers hockey game dominated the center of the page while London bureau chief Anthony Faiola's "Letter from Britain" feature, headlined, "Eurovision drought feels like a hard day's night," was published directly beneath that [see image following page break].

"Starting next year, the federal government will charge a new tax on health insurance firms based on the plans they sell to individuals and companies, known as the fully insured market," Harrison noted. "Meanwhile, the provision exempts health insurance plans that are set up and operated by businesses themselves (the self-insured market." Harrison went on to explain that "experts warn that insurance companies will pass the costs directly to small businesses, [t]he vast majority" of which "purchase coverage in the fully insured market," as opposed to many "large corporations" which self-insure and hence will avoid the tax.

In 2010, then-Speaker Nancy Pelosi (D-Calif.) said we had to pass ObamaCare to find out what's in it. As time goes on and full implementation nears, we're finding out more and more of what's in ObamaCare and the deleterious effects it's having on individuals, families, small businesses, and ultimately the American economy writ large. It isn't pretty, and for the most part it seems the national liberal media are doing their best to downplay the imminent train wreck.

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