SHOP's a Flop

CMS is changing the way small businesses can buy insurance through SHOP Exchanges. Left leaning health care “reporters” are crying foul claiming that the Trump Administation is trying to dismantle or “effectively end” the program. While these claims are nothing more than fake news aimed at placing blame on the opposition, maybe the government should take a look at ending this program.

The SHOP Exchange was created to provide employers with less than 50 employees an easy to use process to enroll employees in group health insurance. The big carrot at the end what that if you had a small number of low wage employees there was a chance you could receive a tax credit. It was such a great option for small businesses that CBO estimated SHOP’s would have 4,600,000 people covered by now.

If only it was as “simple” as it sounds. Turns out SHOP enrollment is extremely cumbersome, there are less plan options compared to the off exchange market, and that tax credit, well it hasn’t been worthwhile for most employers. Plus it’s only available for a maximum of two years.

Couple that with Obama screwing his own law by allowing Grandmothered Plans and what you’ve got is a high cost, low volume platform destined to fail.

The Federal SHOP has a paltry 38,749 people covered. State based SHOP exchanges have fared better with about 193,949 enrolled. While enrollment is higher, part of that comes from the DC health link which forces employers to use the chassis. As of 2017  64,805 where enrolled through DC Link. Of this amount Congress and staffers represent about 11,000 people. A second state, Vermont, also forces employers to use their exchange and has 46,099 enrolled.

So when not forced or illegally enrolled (Congress is NOT a small business) total enrollment into SHOP exchanges is 121,794.

Less than 3% of projected enrollment. That is why SHOP should be dropped.