Small-business enrollment on new insurance marketplaces set up under the president’s health-care law has fallen well short of the administration’s expectations, according to government report released Thursday.
The Government Accountability Office examined enrollment totals for the online small-business exchanges, commonly called SHOP exchanges, in states that built their own health insurance portals. Most states defaulted to a federally operated small-business marketplace — a complementary site to the more widely known individual exchange. Both exchanges are slated to relaunch this weekend.
During the first eight months, fewer than 12,000 small businesses signed up for plans through exchanges in the 18 states that built their own marketplaces, GAO found. Collectively, those companies enrolled about 78,000 workers.
While the Obama administration did not set SHOP-specific goals, the federal watchdog said that number was “significantly lower than expected.”
GAO officials noted that enrollment figures for the federally operated small-business exchange won’t be available until next year from the Centers for Medicare and Medicaid Services. However, CMS officials don’t expect the enrollment rates on the federal site to be much different than those on the state exchanges, according to the GAO report.
“Obamacare’s SHOPs have been fraught with errors and high costs from the very beginning,” Rep. Sam Graves (R-Mo.), who chairs the House Small Business Committee and requested the GAO report, said in a statement.
Although the focus thus far has been on enrolling previously uninsured individuals, helping more small companies find more-affordable coverage was a central objective of the health law. However, while the administration rushed to fix problems with the federally operated individual marketplace, repairing the glitch-ridden employer marketplace was pushed back a year.
Small businesses in states using that exchange could still apply for SHOP plans, but they have had to do so through brokers and paper applications — hardly the online shopping experience that was supposed to resemble Orbitz or Priceline. Consequently, while the individual exchange exceeded its first-year enrollment goal, with roughly 7.3 million sign-ups, small business enrollment has lagged.
It isn’t just the federal government’s small-business site that has had problems. Only some states managed to set up an online shopping portal during the first year, and in many cases, key features were not available. Interest from insurers also varied widely, with some small-business exchanges listing only a handful of plans.
In Maryland, for instance, health officials delayed and eventually nixed their plans to build an online employer marketplace, turning the process over to broker groups. It could be another year until the site is up and running.
In Washington state, the small-business exchange is available only in two rural counties, because too few insurers signed up to sell plans. Only 11 companies with about 40 employees purchased plans in the past year.
Insurers have said early enrollment in existing plans, which do not have to comply with new minimum coverage standards in the law, has also depressed interest in new plans offered through the SHOP exchanges.
Additionally, the GAO pointed out that tax credits available through the small-business marketplace were supposed to be one of the main draws. However, officials say that “the credit may be too small and administratively complex to motivate many employers to enroll.”
The federally run individual and small-business marketplaces are scheduled to relaunch on Saturday, giving employers in many states their first look at the online shopping experience they were expecting last October. However, the White House has already pulled back on its second-year enrollment target for both exchanges, projecting about 9 million sign-ups, down from an original estimate of 13 million.