HHS Officially Delays a Key Part of ObamaCare’s Small Business Exchange Program

Credit: WhiteHouse.govCredit: WhiteHouse.govIt’s official: At least one part of ObamaCare’s system of health insurance exchanges definitely won’t be open on schedule: On Monday, the Department of Health and Human Services confirmed that the small business health options program (SHOP)—which was intended to provide insurer choice to small businesses—will be delayed by one year.

Small businesses will still have the ability to purchase a health plan for their employees through a health insurance exchange set up under the law. But the employees won’t have a choice of plan. Originally, the law called for the small business exchanges to let small employers pick a benefit tier to offer their employees; workers would then be able to select from a variety of plans within that tier. Because of the delay, the 33 exchanges run by the federal government will only allow employers to pick a single plan to offer all employees. States running their own exchanges will have the option to offer choice, but won’t be required to do so.

What that means is that exchanges in the majority of states won’t be offering health plan choice to small business owners. For all practical purposes, then, the law’s exchanges will offer nothing to small business owners and employees. As health policy professor (and ObamaCare supporter) Timothy Jost noted in Health Affairs when the delay was first proposed, the choice option was the “primary benefit” offered by the law’s small business exchange system. Without that option, he wrote, it’s “unclear what advantage” those exchanges would actually offer to small employers over currently available insurance options. The Chamber of Commerce seems to agree. As USA Today notes, it issued a statement saying that because of the delay, small business insurance purchased in the health exchange, "will be of little or no value to employers, or by extension, their employees."

Why the delay? According to The New York Times, the administration is citing unnamed “operational challenges.” Some reports suggest that insurers were not able to come up with plans that worked within the law’s guidelines in the time they had. Insurers, according to the Times, blame the administration “because it did not provide detailed guidance or final rules for the small-business exchange until last month.”

In other words, despite repeated assertions from senior administration health officials that the exchanges would be open on time, at least one key component clearly won’t be. The administration and the insurers it’s working with couldn’t manage the technical and logistical hurdles of the implementation fast enough. The nuts-and-bolts work of constructing ObamaCare’s complex infrastructure is turning out to be more difficult than the law’s backers anticipated.

The administration continues to maintain that the bulk of implementation will be ready on schedule. But you can already see their confidence slipping. The Medicare official heading up the exchange creation process recently told insurers that “it’s only prudent to not assume everything is going to work perfectly on day one,” and indicated that the administration was preparing contingency plans in case some exchanges aren’t ready for prime time. The official in charge of managing the law’s exchange technology, meanwhile, said he was “pretty nervous” about the opening of the exchanges. At this point, I would be too. 

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  • fried wylie||

    Because of the day delay, the 33 exchanges...?

  • Fist of Etiquette||

    The nuts-and-bolts work of constructing ObamaCare’s complex infrastructure is turning out to be more difficult than the law’s backers anticipated.

    THEY DIDN'T ANTICIPATE JACK SHIT BEYOND GETTING SOMETHING ANYTHING PASSED.

  • Rich||

    Dammit, Fist, they never claimed it was a perfect bill!

  • John||

    It was a start. Something had to be done. it was going to bend the cost curve.

  • NoVAHockey||

    they never really did say which was it would bend. just that it would.

  • Dr. Awkward||

    OT (sorta): Mrs. McSuderman writes a desperate cry for help an article telling the youths to hurry up and get married, it's good for your sex life.

    Actually, she says it's easier to find a life-partner when you're younger because everyone's still single. It's good advice that should be common sense but feminists and PC morons have beaten that sort of wisdom out of almost the entirety of the population.

  • ||

    but feminists and PC morons have beaten that sort of wisdom out of almost the entirety of the population

    Honestly, not to defend feminists or PC morons here, but in my experience the biggest source of delay-marriage messaging has always just been education-pushers. It's not like it's only women who are getting this message.

  • Dr. Awkward||

    You don't think it's mainly the ladybears who are being told, No! Use your brain, not your uterus, unless you want to become a simple vessel of procreation you sow, you brood mare! ?

  • Auric Demonocles||

    Everything they discuss as some horrible thing sounds good from my perspective. The attractive women that will be left in another couple of years will have to accept my average-at-best looks to get the rest of my marketable qualities? Helps make the recent breakup feel more like the right decision (but not as much as the dinner I'm having with a cute nurse tomorrow).

  • John Thacker||

    Medicare Advantage rates were supposed to be cut by 2.3%. Instead, they're getting raised by 3.3%. The biggest excuse given is because the math justifying the 2.3% decrease was based on the idea that we weren't going to have a "doc fix" and the SGR was going to actually be enforced.

    None of the ObamaCare cuts will actually happen. I'm not sure that many of the special taxes (like the medical device tax) will happen either.

    I suspect that a fair number of supporters of the plan expected that to happen, though perhaps a few deluded souls thought that it would actually reduce the deficit.

  • John Thacker||

    Insurance stocks jumped massively yesterday afternoon and this morning in response to that decision.

  • Peter Suderman||

    I'm planning to write about this a little later today or possibly tomorrow.

  • NoVAHockey||

    assume you saw the CRS report

  • Palin's Buttplug||

    Medicare Advantage subsidies were slashed though.

    Not all the bill is about the crappy mandate.

  • John Thacker||

    No, they were scheduled to be slashed, but in reality, the slashing has been postponed right as it was about to happen, just like with the SGR and the "doc fix."

    What was referred to as "subsidies" was the higher total rates paid to Medicare Advantage plans than to regular Medicare plans (albeit for better coverage, which is why seniors like them.)

    As noted in the article, the slashing of those rates has been postponed, after complaints from the insurance industry and Senators with constituents on the plan (which includes a lot of seniors in states with Democratic Senators, like Oregon.)

    So far, none of the scheduled cuts have happened. What does that say about our confidence that future cuts will actually happen?

  • John Thacker||

    Granted, I believe that there are one or two other ways that Medicare Advantage plans were to be attacked, but again I don't believe that any of those have taken affect yet.

    I think it's quite significant that the first cuts scheduled to actually take place have been postponed just as they would hit, just like the SGR and the doc fix.

  • Rich||

    "Once people understand what is in the law, they like it," [John Arensmeyer, CEO of the Small Business Majority] said. "The problem is this is one of the things they like."

    Would someone *kindly* rephrase this?

  • John Thacker||

    It's a group that supported the law. He's disappointed because he thinks that once people start getting the benefits of the spending, they'll like the law a lot more. Since the exchanges are being delayed, people will continue to dislike the law a lot, raising the chance of repeal, etc.

  • mad libertarian guy||

    raising the chance of repeal

    LOLOLOLOLOLOLOLOLOLOLOLOLOLOL

    This pieceof shit will NEVER be repealed. Even those who have publicly stated the desire to repeal it would never do so; they seek to "improve" upon it.

  • Rich||

    So, liking the law will result in repealing the law. Got it.

  • Tulpa (LAOL-PA)||

    Anyone who thought the "benefits" of the law to anyone outside govt would ever come to fruition is a moron.

  • EDG reppin' LBC||

    It's just the inane quotes of a lobbyist from a fake Small Business advocacy group. This man is a sham: http://www.smallbusinessmajori.....y/team.php

    Trying to Google info about his company (ACI Interactive) and history. There is nothing there. He is simply a shill for Obamacare, and the Small Business Majority is a fake enterprise, organized to shill for Obama's policies on health care, energy, and finance. Not credible!

  • Peter Suderman||

    Thacker: It's a group that supported the law because it saw something it could get out of it. But now one of the things the group wanted is being taken away -- or at least delayed. This is their not-so-subtle way of saying "we are going to have a hard time supporting the law without this provision."

  • John Thacker||

    Well, I have a hard time verifying that they're not just an Astoturf group. But yes, their stated constituency's primary benefit is being delayed, which should upset them. Definitely agree that the "people" that they're referring to who would like the law more with the small business exchanges are their stated constituency of small businesses.

  • CampingInYourPark||

    From the "Small Business Majority" web site:

    Ashley Ascott
    Cary Madison Partners
    Morrisville, North Carolina

    "Reform needs to cover everyone and it needs to eliminate the insurance company practices that exclude so many people with health problems.
    'I just wish somebody would stand up and take a stand on it and stop trying to get around it,' she says. 'It's simple: health insurance is expensive and people need it. Either you're going to give it to us or you're not.'

  • CampingInYourPark||

  • Auric Demonocles||

    It's simple: health insurance is expensive and people need it.

    Now, you might be able to make the argument that people need healthcare, but health insurance is certainly not a necessity.

  • fried wylie||

    “it’s only prudent to not assume everything is going to work perfectly on day one,” and indicated that the administration was preparing contingency plans in case some exchanges aren’t ready for prime time.

    Expect the contingency plans to ready in time.

  • DontShootMe||

    If only the sequester hadn't happened, then all the exchanges would have been finished on time.

  • LTC(ret) John||

    meme preview!

  • Tulpa (LAOL-PA)||

    According to The New York Times, the administration is citing unnamed “operational challenges.” Some reports suggest that insurers were not able to come up with plans that worked within the law’s guidelines in the time they had. Insurers, according to the Times, blame the administration “because it did not provide detailed guidance or final rules for the small-business exchange until last month.”

    It's like the boardroom part of Celebrity Apprentice, except nobody gets fired at the end and turning off the TV doesn't make it go away.

  • Auric Demonocles||

    Good alt-text Pete!

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