An Early Look At SHOP Marketplaces Low Premiums Adequate Plan Choice In Many But Not All States
Author: Jon R. Gabel, Sam T. Stromberg, Matthew Green, Amy Lischko, Heidi Whitmore
The Affordable Care Act created the Small Business Health Options Program (SHOP) Marketplaces to help small businesses provide health insurance to their employees. To attract the participation of substantial numbers of small employers, SHOP Marketplaces must demonstrate value-added features unavailable in the traditional small-group market. Such features could include lower premiums than those for plans offered outside the Marketplace and more extensive choices of carriers and plans. More choices are necessary for SHOP Marketplaces to offer the “employee choice model,” in which employees may choose from many carriers and plans. This study compared the numbers of carriers and plans and premium levels in 2014 for plans offered through SHOP Marketplaces with those of plans offered only outside of the Marketplaces. An average of 4.3 carriers participated in each state’s Marketplace, offering a total of forty-seven plans. Premiums for plans offered through SHOP Marketplaces were, on average, 7 percent less than those in the same metal tier offered only outside of the Marketplaces. Lower premiums and the participation of multiple carriers in most states are a source of optimism for future enrollment growth in SHOP Marketplaces. Lack of broker buy-in in many states and burdensome enrollment processes are major impediments to success.