Small businesses give exchanges mixed reviews


More small businesses than expected are signing up for health insurance on state exchanges that opened this month.

The insurance markets began operating Oct. 1 under the health care law. They were designed to offer low-cost insurance for individuals and small businesses. Many business owners have been pleasantly surprised by the rates and coverage, according to accounts from owners and state officials. But some owners are disappointed and plan to buy insurance privately.

A spot check of exchanges across the U.S. shows the number of companies that have opened accounts on any state exchange so far tends to be in the hundreds. Officials note it’s still early in the process given that policies sold on the exchanges won’t take effect until Jan. 1.

But the brisk pace some states report seeing for small businesses may not be representative of the total picture. According to an internal memo obtained by The Associated Press, the Obama administration projected that nearly half a million people would sign up for insurance through the markets in the first month. That forecast preceded rampant computer glitches that have kept many potential customers from enrolling. The administration is taking the lead in running the markets in 36 states. It has yet to release numbers.


Dominique Rodgers is pleased with the rates on Louisiana’s exchange.

“They looked comparable to what I’m paying now, a little more expensive,” says Rodgers, office manager at Reputation Capital Media Services, a marketing firm based in Baton Rouge, La.

She’s not ready to sign up for coverage. She’ll meet with her company’s outside human resources adviser and review the options before making a decision by early November.

Members of the Small Business Majority are generally pleased by what they’ve seen, says John Arensmeyer, CEO of the advocacy group.

“The rates are a little better than they expected,” Arensmeyer says. “They’re not seeing costs go through the roof.”


In Vermont, while many owners like what they see on the exchange, others say the premiums are too high, says Robin Lunge, the state’s director of health care reform.

“They’ll now have better coverage but it will increase their monthly costs,” she says.

Dr. Leo Lombardo was surprised to learn from the California exchange that he’s unlikely to get a break on insurance for employees he’ll soon hire for his clinic. Under the new law, employers can get a tax credit if the average salary they pay is under $50,000. Lombardo, whose practice is in Ventura, expects to pay salaries of $80,000 and more to his staffers, including a nurse and physician’s assistant.

“Without the additional tax credit, there’s no advantage in going to the exchange compared to going to an insurance company and buying a small business policy,” he says.