Key Part of Obamacare’s Small Business Exchange Delayed Again

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.