Small businesses were an afterthought in Obamacare

November 15^th marks an anniversary of sorts for the start of Obamacare in 2013, after the administration failed to deliver on the originally planned October 1^st start date.  Since the passage of and initial implementation of Obamacare, small businesses have been ill-served – delays, confusion, and higher costs characterize their experience with the law to date. After one year, a report card for the Small Business Health Options Program (SHOP) created by Obamacare would have a failing grade, and a non-partisan study this week shows the problems are even worse than expected. 

On Thursday, the Government Accountability Office (GAO) released a report, prepared at the Small Business Committee’s request, confirming that enrollment for both the federal and state-operated Affordable Care Act Small Business Health Options Program (SHOP), which are the exchanges where small businesses are supposed to shop for coverage, is much lower than expected.  

{mosads}On November 10^th, the Obama administration predicted that general participation in the exchanges is expected to be 30 percent lower than expected, but its track record in the small business program’s enrollments is even worse. The GAO identified only 76,000 participants from 12,000 businesses in the SHOPs run by 18 states, and in Mississippi, just one person enrolled. The Administration is still unable to provide data for the federally-operated SHOPs in the remaining states, but Centers for Medicare and Medicaid Services (CMS) admitted to GAO that it anticipates low enrollment numbers much like the sample from the state programs.

The low enrollment is a far cry from the projections of the Congressional Budget Office, which estimated in April 2014 that 2 million employees would enroll in coverage through the SHOPs over the course of the year, rising to 3 million in 2015 and then 4 million enrollees by 2017.

From the start, Obamacare’s small business program has been marked by mismanagement, as the administration repeatedly missed deadlines and fell short of expectations. In the summer of 2013, the Committee requested that GAO study the administration’s efforts before the program’s introduction. The GAO found that the administration was unprepared for the rollout, and faced “implementation challenges going forward.” Both predictions were validated by the faulty execution and continuing delays, glitches and underperformance of the program.

To better understand the program’s performance, the Committee on Small Business has repeatedly urged the administration to provide enrollment data on the federal and state SHOPs. The GAO report this week is the first release of SHOP performance data from the federal government. From the start, CMS and the Department of Health and Human Services did not build into the program mechanisms to measure and monitor performance at launch or beyond, and the administration appears to be scrambling to catch up and find a way to count and manage enrollments in 2015.

Unfortunately, the weak enrollment is not the only bad news for small businesses. The SHOPs were touted as the place where small businesses and their employees could compare plans and choose the best benefits, with competition that lowered prices. Instead, costs are increasing for nearly two-thirds of small businesses (among those that provide health insurance to their employees). Furthermore, the majority of small business owners paid more per employee for health insurance in 2013 than in 2012.

The lack of choice is among the problems plaguing the program. In Washington state, SHOP plans were only available in two counties, leading to the enrollment of just eight employers. Also a concern is the series of delays and missing features in the program, most notably online enrollment. Finally, one benefit of using the exchanges – the small business health care tax credit – proved to be too complex, narrow and temporary to act as a significant incentive to enroll.

From day one, the administration has been unable to deliver on its Obamacare promises, and the costs of this mismanagement are piling up for small businesses. America’s 28 million small businesses, employing half of the nation’s private sector, should have been a high priority in every decision, and deserve much better in 2015.

Graves has represented Missouri’s 6th Congressional District since 2001. He is the chairman of the Small Business Committee and also sits on the Transportation and Infrastructure Committee.