Choice of Plans Under Health Law Delayed for Small Firms.

[elleng]

Source: nyt

'Unable to meet tight deadlines in the new health care law, the Obama administration is delaying parts of a program intended to provide affordable health insurance to small businesses and their employees — a major selling point for the health care legislation.

The law calls for a new insurance marketplace specifically for small businesses, starting next year. But in most states, employers will not be able to get what Congress intended: the option to provide workers with a choice of health plans. They will instead be limited to a single plan.

This choice option, already available to many big businesses, was supposed to become available to small employers in January. But administration officials said they would delay it to 2015 in the 33 states where the federal government will be running insurance markets known as exchanges. And they will delay the requirement for other states as well.'



Read more: http://www.nytimes.com/2013/04/02/us/politics/option-for-small-business-health-plan-delayed.html?hp

[Demeter]

1. Surprise Surprise

Just like the refinancing schemes, and the cash for clunkers, and all the other razzle-dazzle BS.

Buy the sizzle, and lose the steak and your stake.

[Autumn]

2. Why did the administration not provide

detailed guidance or final rules for the small-business exchange until last month?

[PoliticAverse]

4. They had to wait til the bill passed to find out what was in it. n/t

[Autumn]

5. The ACA passed in 2010. Seems to me they should have had someone working

on it since then.

[PoliticAverse]

9. Apparently Insurance company lobbyists have been working on it and got a delay in the start

of competition.

Many people thought that Insurance companies loved the mandate but would chip away at the other
parts of the law that they didn't like.

[dkf]

3. Trust in government requires proper execution.

[quadrature]

6. how do you buy something, that nobody is offering

to sell?

just curious.

[Yo_Mama]

7. I was hoping this was an April Fool's joke

but it turns out it isn't.

This is very unfortunate, not least because if each small business has only one choice of a plan on the exchange, then most hopes of cutting costs through competition are obviously gone. For small businesses with a mix of older and younger employees, being able to pick different plans for their employees would have been crucial.

So now aren't small businesses locked into the same sorts of plans they have been, except with new mandates and higher costs?

Since small businesses are for the most part not subject to the fines for non-coverage of employees, it looks like many of them may not participate fully, which will raise the overall costs.

Usually small business owners are older, and they will want the more comprehensive coverage for major illness/injury. But that comes coupled with the new preventive mandates, so those plans will be high-cost. So if they charge their employees higher premiums than 9.5%, the younger employees will buy on the exchange and get the subsidy. Essentially we are shifting funding from cos to the taxpayer.

There's a provision in this law that starts cutting subsidies or coverage by 2019 if they are too expensive, and I'm thinking we are now doomed to see that. Most people don't know about that part of the law, but it will really hurt a lot of people if it happens:
http://www.kff.org/healthreform/upload/7962-02.pdf

The total subsidies are limited to 0.54% of GDP. That's about 85 billion currently. The last CBO estimate I read on the health care subsidies was 574 billion between 2014 and 2019, but the total cost was supposed to rise quite rapidly (low in the first year or two). That gets us very close to the point at which the health care subsidies have to be cut under current law (574/5 = 114 per year, if evenly spread).

This is the July 2012 CBO estimate:
http://www.cbo.gov/sites/default/files/cbofiles/attachments/43472-07-24-2012-CoverageEstimates.pdf

They are guessing 137 billion in exchange costs in 2019. That seems quite likely to trigger premium cuts.

Over the longer haul, getting those small companies to ensure their employees with ACA-approved plans is crucial to keeping the exchange subsidy cost down so that premium subsidies don't have to be cut.

[PoliticAverse]

8. "in recent weeks, insurance companies urged the administration to delay the employee choice" n/t