The Obama administration recently announced that portions of health care reform that were of particular interest to small employers (the Small Business Health Options Program, or SHOP exchange) will be delayed. The headline in the New York Times article went so far as to say, “Small Firms’ Offer of Plan Choices Under Health Law Delayed”.
Small firms won’t be able to offer choices to their employees? Really?
Two reactions: first, of course it would be great to have multiple carriers offering multiple products to consumers. But even one carrier can offer multiple products to consumers. So the idea that small employers are limited to “one plan” is not necessarily true. Additionally, we’ve seen a steady uptick in interest among small employers in providing premium reimbursement accounts (PRAs) to their employees and allowing them to shop for medical coverage on the individual market. This will accelerate when insurance moves to “guarantee issue” in January 2014, when it will be even easier for employees to purchase their own individual insurance and use tax-preferred dollars to pay for their coverage.
The second reaction: consumers want affordable coverage. Even if there are multiple carriers offering multiple plans in one exchange (public or private), the hard reality is that reform has not gone far enough to address the problem of high (read: “unaffordable for some”) premiums.
Once the high premiums have been addressed, we believe that consumers will feel like they have choices, even if the options are limited to one carrier. Most consumers would feel like they had choice if they can select among “rich” and “lean” plans according to their needs, their pocketbooks and their comfort with financial exposure. And that’s the key: there isn’t choice if you can’t afford it in the first place.