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May 15, 2017 01:00 AM

Trump administration seeks to end HealthCare.gov enrollment for small companies

Virgil Dickson
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    The Trump administration on Monday proposed to allow small businesses to sign up for insurance coverage directly through an agent or broker rather than HealthCare.gov, citing their low enrollment in the federal marketplace.

    The change, slated to take effect Jan. 1, 2018, allows small businesses to skip using the Affordable Care Act's Small Business Health Options Program, or SHOP, marketplaces, which have been used very little since their launch in 2013.

    "Our goal is to reduce ACA burdens on consumers and small businesses and make it easier for them to purchase coverage," CMS Administrator Seema Verma said in a statement Monday. "This new direction will help employers find affordable healthcare coverage for their employees and make the SHOP exchanges function more effectively."

    The Congressional Budget Office had estimated that 4 million people nationwide would enroll in coverage through the SHOP marketplaces by 2017. As of January 2017, only 230,000 individuals have used the program. Small business employ fewer than 50 workers.

    Unlike larger companies, small businesses are not required to buy their employees coverage, which factored into the marketplaces' low utility. Many employees at small companies gained coverage either through the individual market or Medicaid, according to Sarah Lueck, senior policy analyst at the Center on Budget and Policy Priorities.

    In January, her think tank found that the number of uninsured small business employees dropped by 4.1 million between 2013 and 2015 and their uninsured rate fell from 27.4% to 19.6%.

    Given the relatively small SHOP enrollment, the policy isn't expected to have a large impact, experts say.

    "Since the response to the SHOP from the small business community has been pretty underwhelming, the affected population is relatively small," said Katherine Hempstead, director of health insurance coverage at the Robert Wood Johnson Foundation.

    The new policy is likely less about lowering barriers to coverage for employees of small companies and more about reducing federal resources dedicated to operating the federal SHOP.

    "Shifting the program to the existing health insurance brokerage industry saves the CMS money and time," said Emily Evans, managing director of Hedgeye Risk Management.

    It appears the new policy's aim is to reduce federal oversight of SHOP, given the program's small enrollment, according to Elizabeth Carpenter, a vice president at Avalere Health.

    HHS has spent at least $1.7 billion to launch and operate HealthCare.gov, according to federal estimates. The agency has not released a breakdown of SHOP-specific spending.

    Officials at Small Business Majority, a trade group of small companies, said it believes that the Trump administration is attempting to essentially end SHOP as a coverage option.

    Under the new policy, businesses would still have to use HealthCare.gov to determine eligibility for SHOP coverage before going to a broker to enroll in the program.

    "Forcing small employers to make this extra effort just to enroll in SHOP will make it likely that SHOP usage dwindles to little or nothing," the Small Business Majority said in a statement Monday.

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