SHOP Exchanges Taking a Slice of Small Biz Market
"For health plans, there remains enormous variability in potential outcomes and adoption rates," Kim said. "Flexibility remains the name of the game to be able to participate without over-committing, yet also without hamstringing efficiency and differentiation… The promise of SHOP is very attractive for small businesses, and it very well may be a significant shift for small and large businesses. At the same time, it is hard to be definitive."
According to Kim, three factors will determine the market impact of the SHOP exchanges:
- Uncertain market rates for plans available on the exchanges: Rates could mimic premium increases seen in the individual market due to benefit structure requirements; or volume and risk pooling could reduce overall premiums.
- The attractiveness of medical underwriting for certain industries with lower risk profiles and uncertainty about the negatively self-chosen market that remains.
- The evolution of private exchanges that may allow more medically underwritten rates at a group level.
"At the same time, much of the sensitivity to pricing and market rates is up to the employers and their perception of hiring and retention competitiveness," he said. "The impact of those considerations remains to be seen."
Christopher Cheney is health plans editor at HealthLeaders Media.
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