Report Looks at SHOP Exchange Viability

by David Gorn

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The first series of forums put on by Small Business Majority went to small towns and cities across California to raise the notion of a business-specific health insurance exchange  -- the Small Business Health Options Program, known as SHOP. The idea is to pool small business resources and buying power -- separate from the California Health Benefit Exchange's individual market -- so business owners can get a better, more financially stable option for health insurance.

Now, a second set of forums -- with experts from California, as well as from other states that have tried similar projects -- has finished. This week the Small Business Majority released a report summarizing the points brought up in those forums.

"Affordability is the number one issue to small business owners," according to Terry Gardiner of Small Business Majority. "Most companies who have not offered insurance say it's because it's too expensive, they cant afford it. And the ones who actually are providing coverage, they are struggling."

Those struggles are not just from the recession, but also from large and unpredictable insurance premium rate hikes, he said.

"As a business owner myself, I can certainly identify with what these people are going through," Gardiner said. "Trying to compete with large businesses, and you get a huge premium increase with no explanation. You look at it and say, do I have any alternative?"

The take-home message on setting up a SHOP exchange in California is to make the process easy for small business owners, Gardiner noted. "They said to keep it simple and not bureaucratic, they are experts on their businesses, not on health care options."

According to the report, "simple" means a standardized, one-page application form for the employer, Gardiner said.

At the road-trip forums, given the level of hyperbole on a national level about health care reform, Gardiner said there was an air of suspicion about the SHOP exchanges. "They haven’t experienced a SHOP exchange, and they don’t know what it is," Gardiner said. "We had to start the dialogue with: What is it, how does it work, and what are the opportunities for small businesses?"

Small business owners' familiarity with buying pools such as agricultural cooperatives and trade associations, Gardiner said, made the idea an easier sell -- once attendees got past the initial skepticism.


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