Study: Small business exchanges attract competition

Health insurance exchanges for small business have been gaining traction as more insurers choose to sell plans on these marketplaces, according to a Commonwealth Fund study.

Of the 18 state-based small business health options program (SHOP) exchanges, all but four have more than one insurer in each county participating. New York boasted the most insurers with 10 different companies, while the number of plans varied from 12 in Connecticut to 267 in the District of Columbia.

"Nearly all state-based SHOP marketplaces attracted enough competition to offer small employers and employees a choice of insurers and plans, across a range of coverage levels and in nearly every county," the study found.

The widespread acceptance by insurers is perhaps the best measure of success so far for the small business exchanges. "Most states were able to attract at least one of the three largest insurers (measured by market share) in the state," the Commonwealth Fund study states. Small businesses will be able to offer more health plan choices to their employees through the SHOP marketplace than off the exchange.

That success comes despite a few delays to the SHOP marketplaces. The Obama administration, for example, postponed the availability of online applications for small businesses wanting to sign up for the SHOP marketplace, FierceHealthPayer previously reported.

Going forward, most states are developing tools that will help compel businesses to use the SHOP exchanges, which will determine success. "The degree to which small employers find the SHOP marketplace user-friendly and cost-effective will be critical factors in determining whether they offer coverage through the SHOP, outside the SHOP, or not at all," the study states.

Some states, however, have faced technical glitches akin to the ones plaguing other state and federal exchanges. In California, officials temporarily halted its small business exchange to implement a series of redesigns, FierceHealthPayer previously reported.

To learn more:
- here's the Commonwealth Fund study (.pdf)

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