January 30, 2023
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Editorial: Broken promises with health care exchanges


Reading between the lines of the latest announcement on Obamacare, you get the feeling that there really is an industrial-financial-insurance complex that’s bound and determined to eat up all the profits of every small business in the United States.

I’m referring to a recent statement by the Obama administration that it is delaying or shelving a key goal of the program — multiple options for smaller companies offered through health insurance exchanges being set up in 33 states.

Those states, which include California, were supposed to level the playing field between large and small employers by offering competitive bids for coverage for companies with 50 or fewer employees.

But according to the New York Times, the administration blames “operational challenges” for the fact that most small businesses will have just one option offered to them under the exchanges. The reason for the foot-dragging was the inability of insurance companies to come up with viable options for small employers.

The way the law was written, an open bidding process on the exchanges would have used the competitive marketplace to help shave billions in premium costs for the nation’s roughly 5 million small businesses with payrolls. A huge beneficiary could have been another 20-plus million sole proprietorships that are literally mom-and-pops or one-person operations.

The exchange would have brought real competition to individuals or extremely small groups who typically pay through the nose for coverage. And it could have leveled the playing field for companies with a handful to a few dozen workers that definitely pay more than large companies for roughly equivalent coverage for workers of an equivalent skill level.

The bottom line is that large insurers are so wedded to the profits and administrative charges they are earning on these very lucrative health care contracts that they are unwilling to let go. The same seems to be true for very large banks, which are now seeking to raise fees for payroll processing and other small-business services. And it’s true for any products where the options are few.

Any small-business owner can tell you that the heated competition between Dell, HP, Lenovo and even Apple has helped keep the price of technology affordable. We need to do something similar with health care. Or the engine that produces most of America’s net new jobs will continue to sputter.

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  1. Henry I hear you on only have 1 option via the state exchanges however this is only temporary- they needed another year to get set up.. ADP has a site dedicated to updates on health care reform. (I included a link to the specific update to your editorial in the website section)

    Here is the bottom line:
    1. Employers that purchase health insurance through the federal SHOP Exchange will be limited to choosing one qualified health plan for their employees until 2015.
    2. The federal government expects that small employers will have the ability to choose multiple qualified health plans through the federal SHOP Exchange beginning in 2015.

    So we got about another year for multiple options… I hope this is helpful

  2. Small businesses already pay, on average, 18% more than large ones for health insurance.

    But then, hey, “If you’ve got a business – you didn’t build that. Somebody else made that happen.”