"In San Diego County, four companies will offer SHOP plans: Sharp HealthCare, Health Net, Kaiser Permanente and Blue Shield."
Health exchange releases new small business rates
Says San Diego companies with fewer than 50 employees could save 12 percent
By Paul Sisson
Aug. 1, 2013
San Diego County small businesses will be able to save 12 percent on health insurance premiums for their employees if they buy coverage next year from the state’s newly created health exchange, officials announced Thursday.
Covered California, the state agency tasked with creating and running the new health insurance exchanges mandated by the Affordable Care Act of 2010, released selected rates for many California regions that it says are less expensive than those now available to businesses with 50 or fewer employees.
Federal health reform calls for each state to create a Small Business Health Options Program, often called SHOP, which will operate alongside a larger exchange tailored to individuals and families.
Both exchanges must be running by Oct. 1 to provide enough shopping time before Jan. 1, 2014, the date when most uninsured Americans must purchase coverage or pay a small penalty.
Small business rates are separated into 19 different geographical regions. In San Diego County, four companies will offer SHOP plans: Sharp HealthCare, Health Net, Kaiser Permanente and Blue Shield.
Covered California did not provide a full list of potential premiums for each company but instead compared prices for a single 40-year-old employee.
Sharp, the only local company offering its own plan in the health exchange for individuals and families, said in a statement that serving businesses made sense because the health system has “long been active in serving the small group market in San Diego.”
In San Diego County, the average of the three lowest premiums offered in the exchange was $290, a rate that the state claims is 12 percent less than an average of $324 for “comparable” small group plans sold this year.
Scott Hauge, president of Small Business California, a nonprofit advocacy group that lobbies in Sacramento on issues that affect small businesses, lauded the rates as a step toward controlling costs.
“It’s a good first step. It adds competition to the market, and any time you add competition, it’s a positive,” Hauge said.
But not everyone was so impressed. Bill Hammett, a San Diego area insurance broker, said there was no way to tell how the state selected a comparable plan to make its cost comparison. He said that, overall, there is just not much difference in costs between companies offering plans on the exchange and those operating in the open market.v
“I have no ax to grind with the SHOP exchange, but I just don’t think it’s going to be the huge splash they were hoping for,” Hammett said.
Dana Howard, deputy director of media and public relations for Covered California, said prices are only one aspect of the SHOP exchange. He said the exchange is designed to allow small companies to act like their bigger competitors by allowing flexibility in the plan selected.
The SHOP exchange, he said, allows a company to “anchor” their coverage on a certain plan and allocate a set amount of money, say 50 percent, that they want to spend on an employee’s premium. But employees can decide on their own to go with a different insurance company offered on the exchange if they don’t like the one their employer selected. That ability [for employees] to move to different plans, Howard said, is usually an expensive option that most small companies can’t afford...