Monday, December 1, 2014

Healthcare. Gov’s Small Options Program (SHOP) for Small Businesses Off to Slow Start

Profound as psychology is, it’s a knife that cuts both ways.

Dostoveski (1821-1881), The Brothers Karamasov (1879-1880)

ObamaCare has a provision known as SHOP that was designed to usher small businesses into the largest health care expansion in the history of America. That was SHOP's intent.

SHOP was a positive psychological move to bolster confidence among small businesses in the Obama administration.

This provision was reasonable. Small businesses, with less than 50 employees, and more often with less than 25 workers, are the bedrock of American capitalism and hire 54% of all Americans. But alas, the cost for small businesses for offering health insurance for employees is becoming prohibitive.

Businesses , particularly large corporations have been the main conduit to health insurance, covering more than 150 million Americans. But only half of businesses with less than 50 employees cover workers, and in those with 25 workers or less, less than one quarter of employees receive health insurance.

SHOP was to create a marketplace where small businesses could band together to offer, better, cheaper health plans with greater choice. SHOP was limited to a few exchanges in 2014, but after demonstration projects to work out glitches and kinks, SHOP is now open for business in multiple exchanges.

In 2014, only 76,000 businesses opted for SHOP, a tiny fraction of the CMS estimate that over 2 million businesses out there might sign up. This year, an even smaller fraction are signing up. We don't know how many. CMS is mum on the numbers.

Business owners cite technical problems, as well as limited choices, and difficulties for the scant numbers enrolling in the second November 15 sign on period.

The problem may be more psychological than technological. Small businesses simply don’t trust the Obama administration, not only because of disastrous 2014 launch but because of its deep-seated anti-business bias.

It’s the psychology, not the technology. Once you have lost trust, it’s hard to regain it.

Consider the Obama and Democratic business track record.

On July 13, 2012, in a campaign speech in Roanoke, Virginia, President Obama famously declared, “You didn’t built that.” He was implying government not business owners was responsible for the very existence of successful businesses.

On October 24, 2014, in a fundraiser in Boston, fellow Democrat, Hillary Clinton, his erstwhile Secretary of State and a candidate for the Presidency , pronounced “ Don’t let anybody tell you corporations and businesses create jobs.” Who does? Certainly not government, and not ObamaCare, which punishes businesses with $2000 fine for each full time worker not covered.
In 2011 and 2012, President Obama appointed Bill Daley, mayor of Chicago, and later, Jeffery Immelt , chairman and CEO of GE, to patch up relationships and to build a laison with the business community. Both men were frustrated with micromanagement from the Obama inner circle (Valerie Jarrett, David Axelrod , and others) and from sniping liberals who felt the masses were vulnerable and helpless victims of capitalism.

The business community harbors the notion that President Obama, as a social organizer and left-of-center politician, has never run a business, and furthermore is a “lousy boss,” and “incompetent manager, “ having left a number of competent but frustrated appointees in his wake, always casting blame and never assuming responsibility for his failed policies and the stagnant economy. He discourages the XL pipeline and fracking. Both are well on the way to making the U.S. energy independent and creating hundreds of thousands of new jobs while dramatically lowering the cost of gasoline, effectively a tax cut for hard-pressed Americans.

Based on their experiences to date, uneven spikes in premiums and deductibles, higher taxes and burdensome regulations , ObamaCare and other Obama policies raise the cost of starting businesses, staying in business, and thriving in business, small businesses are not rushing into SHOP.

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