Small Business Exchange Delayed as Open Enrollment Approaches

Published July 3, 2013

In the latest setback for the implementation of President Obama’s health care law, the U.S. Department of Health and Human Services has formally delayed the small business health insurance exchange originally set to begin open enrollment in October.

The exchange, formally titled the Small Business Health Options Program (SHOP), will still exist, but not as a marketplace for small business employees to pick their insurance plan, as originally promised. Instead, small businesses will only be able to buy coverage from a single insurance provider for all their employees, eliminating any choice within the marketplace for at least the first year.

According to Sally Pipes, president and CEO of the Pacific Research Institute, such delays are leading to confusion among Americans regarding the status of Obama’s law, as are promises President Obama made that if you liked your current employer sponsored health care plan, you could keep it.

“The House has tried to repeal ObamaCare thirty-seven times already, and this latest delay may be adding to the confusion of the public,” Pipes said. “It’s going to be a real eye-opener for them when they think it was repealed but find themselves in a small business exchange with no choices, and a plan that costs more than their employer-paid plan.”

A Train Wreck

Seton Motley, founder and president of Less Government, says without a choice of plans in the small business exchange, he expects more employers to cut workers’ hours and avoid providing insurance coverage at all.

“What this shows me is that the Obama administration didn’t have the skills or expertise to implement their own plan, so in my opinion, it needs to go,” said Motley. “It’s a terrible bill, it’s already raised instead of lowered premiums like it was advertised, and it’s making it harder for people to keep their jobs because employers don’t want to get tagged by the regulations, so they’re cutting hours for their employees to 30 or less so they won’t have to count them as fulltime employees and thus provide insurance for them under the new law.”

Motley says the continued problems with implementation of Obama’s law are an indication the overall approach is unworkable.

“Nancy Pelosi famously said: We have to pass the bill in order to find out what’s in it. Well, guess what—we’re just now finding out what’s in it, and as some of us predicted, we don’t like what’s in it,” said Motley. “Because so many states (33) declined to set up their health care exchanges, that means the feds will have to go back in and set up the states, but they don’t have the money to do it, which means more delays. When you have Sen. Max Baucus of Montana, one of the principal authors of the bill and a Democrat, saying it’s a ‘train wreck,’ then we should scrap it.”

Insurers Should Expect Pressure

John Dunn, a physician, lawyer, and policy advisor for The Heartland Institute, says Obama’s law is turning out to be exactly what it was intended to be.

“It does nothing to solve the problems it set out to solve and instead puts politicians into a position to make arbitrary decisions that are going to cause a lot of people a lot of grief and suffering. These are people who cannot take care of basic stuff, like balancing the federal budget, so how are they going to successfully implement the most complex piece of legislation in the history of Congress?” said Dunn.

Dunn says the Obama administration will likely exert pressure on insurers to offer more variety through the small business exchange in the future.

“I have no idea how they are going to fix this. I suspect they think that if they apply enough pressure on the private health insurers, who know how to do things like this, then the private sector will ride to their rescue,” said Dunn.