Obamacare driving down health insurance costs for small businesses in Washington


Health care costs on the District’s new small business exchange are steadily falling. (bigstockphoto/BIGSTOCKPHOTO)

Obamacare is starting to have some of its intended effects on the price of insurance for small businesses, particularly in the city in which it was enacted.

District officials last week announced that, for the third time since they started posting proposed plans on a new health insurance marketplace for small businesses, an insurer has lowered its initial prices for coverage. It is a sign, they say, that the marketplace will help bring down health costs for businesses, which have skyrocketed in recent years.

Kaiser Permanente, one of four insurance providers registered to sell to small firms on D.C. Health Link, is the most recent to drop its rates, lowering premiums by 4.4 percent.

The company “worked with the insurance commissioner and the [D.C. Health Benefit Exchange] to ensure our 2014 premium rates are as consumer friendly as possible,” Kaiser spokesman Won Ha said in an e-mail. “We believe all residents should have access to high quality, affordable care, and our adjusted rates reflect that.”

United HealthCare previously dropped its rates by more than 10 percent, and then again by about 5 percent, while Aetna has lowered its prices by more than 5 percent. Carefirst is the only provider that has stuck with its original rates.

“These lower rates are more incontrovertible proof D.C. Health Link is already bringing competition to the insurance market,” said William P. White of the Department of Insurance, Securities and Banking.

The District’s exchange isn’t the only place in which prices are falling.

On Friday, Maryland insurance officials announced they have approved final rates for health care plans for individuals on their state’s new marketplace. Analysis by the officials running the exchange suggests the rates are some of the lowest in the country, some coming in as much as 33 percent lower than what had been requested.

The Department of Health and Human Services recently evaluated proposed insurance premiums in 11 states, reporting that prices for small-business plans in those states have come in an average of 18 percent lower than the premiums employers were paying prior to the Patient Protection and Affordable Care Act.

“The results strongly suggest that greater competition and transparency are leading to substantial benefits for both consumers and employers in these markets,” officials wrote in their report.

It is a sorely needed sign of progress for the health care law, which has been riddled with setbacks in the past few months, particularly with regard to its provisions for employers.

In April, the administration announced it would delay for one year a requirement that business owners be allowed to choose different plans for different workers through the health insurance exchanges, a feature meant to provide added flexibility and help drive down costs for employers.

More recently, officials announced they would also delay what it known as the “employer mandate” part of the law until 2015 by not penalizing firms with more than 50 employees that do not provide adequate coverage to their employees.

Republicans and other critics of the law have latched on to both postponements, pitching them as evidence the legislation is not working.

Mila Kofman, the executive director of the D.C. Health Benefit Exchange Authority, suggested the opposite, noting the plummeting prices in the nation’s capital show the law’s promise.

“It is exciting to see that insurance companies in the District are already aggressively competing for business through the online marketplace,” she said.

J.D. Harrison covers startups, small business and entrepreneurship, with a focus on public policy, and he manages the Post's On Small Business blog.
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