Obamacare

Key Part of Obamacare's Small Business Exchange Delayed Again

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A key component of Obamacare's already-delayed small business exchange has been postponed—again.

When the Obama administration announced in November that it would delay the opening of the health insurance portals meant to serve small firms, it wasn't much a surprise. The federal exchange system had crashed on opening amid massive technical problems, and virtually all the tech work was going into the repair of that system. Signs of trouble were apparent before that, however.

The small business portal delay had been previewed months before the crash, in April, when the administration had delayed what was arguably the key component of the exchange—the "choice" option intended to allow small employers to offer workers an array of plans from which to pick.

That provision has been delayed yet again, at least for states that want to wait. As The Washington Post reports:

In an extension of an earlier delay, Department of Health and Human Services officials have finalized rules giving states another year before they have to implement a key feature of the exchanges meant to help small businesses rein in their health costs.

Originally, every state was supposed to allow small employers to offer employees a choice of multiple plans on the insurance marketplaces — a feature experts say will help stir competition and down rates in the long run.

Now, "the employer choice" feature take wait longer. [sic] According to the new regulations, state insurance commissioners are permitted to opt out of adding that feature to their state's small business exchange this coming year if they have reason to believe it will prompt insurers to raise rates for 2015.

Notice of the delay comes in an article checking up on the status of the small business exchange, known as the SHOP (small business health options program), which federal officials will open as planned later this year. "Other than that change," to the choice option, the Post reports, "the federal small business exchange seems to be on pace for a fully operational debut in November."

That's a little like saying that a car is ready to go because it's all there except for the wheels and steering wheel. Other than that, it's all on track to be fully operational.

The choice component is, by most accounts, the essential function of the small business exchange. When word of last year's delay first came out, influential health policy scholar Timothy Jost, a supporter of the health law, wrote in Health Affairs that the choice option was the "primary benefit" of the small business exchange. If that option is not available, he said, it would be "unclear what advantage" the SHOP exchange would actually offer to small employers over insurance options that already existed.

So the small business exchanges will be ready—except for their primary benefit, the only clear advantage the small business exchange offered over previously available arrangements. Just a small thing, really.

 Delaying only this component allows the administration to claim that the small business exchange is basically on track even while it is still, for most practical purposes, in limbo. And it suggests that the provision may be stubbornly difficult to make functional. When the administration announced the delay of the choice provision last year, federal officials cited vague "operational challenges" to completing the work. This time, they say, the feature will be ready should states opt in, according to the Post. But when it comes to this administration's work on the exchanges, it's worth remaining skeptical of any claims about what will be ready at some point in the future. Last year at this time, the administration was saying that the federal exchange would be ready on launch day, and that the small business exchange, sans choice options, would open along with it.