Health care has always been a stumbling block for small businesses. Many want to provide it but found it out of their reach. The new health care law is supposed to change all that, and Connecticut's exchange is ahead of the curve in providing small business plans. Will anyone take them up on the offer?
Kevin Galvin is a familiar figure to anyone who's dipped a toe in the health care debate in Connecticut. "I have been a small business owner here in the state for 30 years," he said. "I've been involved with health care reform and advocacy around what small businesses need and want out of health care for more than ten years."
Galvin runs a four-person firm, Connecticut Commercial Maintenance, which provides handyman services for national retail chains. He says one of the biggest hits to his productivity is that his entry level workers can't afford health coverage, and lose time in the emergency room when they get sick. That's what turned him into an advocate a decade ago, and in the intervening years it's connected him to a whole network of small businesses that have similar needs. When I spoke with him late last week, Galvin told me this: "I have not talked to a single small business who is going to enter the exchange right now."
The exchange, Access Health CT, is the new online marketplace which opens its virtual doors this morning. It's offering coverage for individuals who don't currently have health plans, but it also has a less well-known feature: a small business portal known as SHOP -- the Small Business Health Options Program. It features three insurance carriers who are offering small group rates for businesses of fewer than 50 employees: exactly what Galvin has always advocated for. "I didn't think we would be rolling into October 1 and there'd be the large number of small businesses I talk to that are taking a wait-and-see attitude," Galvin said.
One of the biggest concerns: the cost. While across the country, rates have not risen as much as some people feared with the advent of the Affordable Care Act, Connecticut has among the highest rates in the nation.
Andrew Markowski is Connecticut spokesman for the National Federation of Independent Business. "I think a lot of small business owners are going to try and ride things out for the next several months," he said, "and see where the rates go in the marketplace. The fear is that into 2014, the rates could go even higher."
Markowski said the other big barrier is simply confusion. The rules around the Affordable Care Act, never simple to begin with, have undergone many revisions in the last year. "The federal government and the administration are, in essence, making it up as they go along, so to speak. Both businesses and individuals need to know the rules of the game well in advance of moving forward."
Officials at Connecticut's exchange don't disagree with that analysis. Spokesman Jason Madrak said, "Businesses have been really confused by some of the gyrations we've seen at the federal level -- postponement of the business mandate, some of the announcement around the federal SHOP program -- [which] have called into question for many businesses whether this is even open for business." Madrak would like to emphasize that it is.
State exchanges were given the option to postpone their small business SHOP plans for a year, but Connecticut is one of a handful of states that went ahead anyway. "We actually feel pretty confident," Madrak said. "I think, given the array of products that we have which are highly competitive, from leading carriers, the fact [is] that we do have these fairly generous tax incentives in place. I think the demand is going to be fairly high, so we're feeling very confident."
He's confident enough to set a target. The exchange wants to sign up 20,000 small business employees through the SHOP program in the first six months of its operation.
"I think that's a bit of an unrealistic number," said Stephanie DeGrandi, a partner in The Health Consultants Group, a Plainville-based health care broker. She and her colleagues advise about 1,000 businesses who already provide health care for their employees. DeGrandi said she's been educating her clients about the exchange plans, and she'll present them as an option along with their current carriers. "Largely, I think they're going to look at it," she said, "but [they are] likely to stay where they are. I think the fear of the unknown is out there, and I don't know how many people want to be guinea pigs."
Companies that already provide plans will be comparing the quality of what's offered on the exchange. Brien Beakey, President of Health Consultants Group, said what they'll see is smaller networks. That means fewer doctors and hospitals working with each plan. "If it's the same rate, or very similar," Beakey said, "and the doctor's not in it, that's going to make a big difference. You know, people don't like to change doctors."
So to meet its targets, the exchange will also need to persuade small business owners who've never been in a position to provide health care that it's time to take the plunge...people like Kevin Galvin. "I think if I had to use my crystal ball," Galvin said, "I will be one of those small businesses who will find that it's just not affordable right now, and I will be assisting my staff to get on the individual exchange." We're promised those crucial rates will be published on the exchange web site at some point today.