Lessons From New Mexico's Small Business Health ExchangeBy
Last month, Albuquerque small business owner Don Leonard sat down in front of a computer with his insurance broker to shop for employee coverage on NMHIX, New Mexico’s health insurance exchange. They entered into the system the names, birth dates, and other data he’d gathered on his 20 employees and, inside of an hour, Leonard Tire and Automotive Repair became one of the first small employers in the country to buy insurance under Obamacare.
Many states have ceded the mechanics of health-care reform to the federal government or concentrated on developing their own insurance marketplaces for individuals. New Mexico stands out because it, along with Utah, first tackled getting small business owners and their employees covered through a state-run online marketplace known as a SHOP, or Small Business Health Options Program. Since New Mexico’s SHOP launched on Oct. 1, almost 1,400 employers have created accounts and 157 small companies have finalized their enrollment for coverage beginning in 2014.
These marketplaces, meant to give small employers an easy way to shop for health plans, are open only to businesses with 50 or fewer employees; employers of this size aren’t required to offer health coverage by the Affordable Care Act. Perhaps even more confusing, the federal SHOP exchange has been postponed for a year, though the 19 states that built or are building their own SHOPs are unaffected by the delay.
Why did New Mexico launch its small business site before its site for individuals? Governor Susana Martinez, a Republican and the nation’s first Hispanic female governor, initially opposed Obamacare. But she broke from her party to endorse portions of the law in 2012 and signed legislation creating a state insurance exchange in March 2013. The late start did not give the exchange enough time to build both individual and small business platforms, says spokeswoman Debra Hammer, so its board voted in May to initially build a SHOP exchange and use the federal government’s healthcare.gov for individuals for 2014. (The state plans to open its individual exchange in October 2014 for coverage starting Jan. 1, 2015.)
Leonard chose a gold-level plan via New Mexico’s SHOP that offers comprehensive coverage, will cost his employees $135 a month in 2014, and allowed them to choose policies from among several insurance providers based on their preference for certain doctors or hospitals. Best of all, he says, the company cost stayed about the same as it was this year, even though he added the equivalent of two full-time employees to the plan.
Lynn Rice, who owns remote observatory New Mexico Skies in rural New Mexico with her husband, Mike, had a far different experience. They were notified that a state-run program, which had covered their two employees at a company cost of under $200 a month, would be closing, and the employees would need to obtain new coverage through New Mexico’s expansion of federal Medicaid coverage under Obamacare.
“They notified our employees that they would be on Medicaid and that did not go over well,” Rice says. “One of them was fit to be tied.” Rather than lose a valuable employee, she chose to buy insurance through NMHIX and began online research in September. “The lack of information has been painful. I spent many, many hours being constantly frustrated” by technical glitches.
After trying unsuccessfully for more than six weeks after the SHOP opened on Oct. 1, Rice says, she got New Mexico Skies enrolled in the SHOP about a month ago. The gold-level plan she selected will cost nearly $1,500 a month for the two employees. Rice says her company, whose clients include NASA, will absorb all the cost and not require its employees to contribute. “It’s a big hit for us, but I think we’ll survive,” she says.
Despite her struggles, Rice praises the NMHIX staff members who helped walk her through the enrollment process. “I can’t say enough positive about the gals that are trying to make this work for New Mexico. They’re coping and they keep up a very good attitude.”
Personal guidance was also crucial for Joanna Boothe, founder of Joanna Boothe Insurance Agency in Rio Rancho, an Albuquerque suburb. Her six employees had been covered by parent company State Farm, but it will drop some staff policies in 2014. Four of the six were able to obtain alternate coverage but two employees, both single mothers, would have been left uninsured next year. “I’m a conscientious employer and I wanted to make sure my employees were safe,” Boothe says.
She says she “wasn’t a fan” of Obamacare and the torrent of bad news surrounding the rollout of healthcare.gov made her wary about even venturing onto the New Mexico SHOP. But she attended an informational meeting sponsored by the local Chamber of Commerce and connected by telephone with Jenny Pandl, one of seven NMHIX staff members. “If the site went down or there was a glitch, I just called Jenny. She always answered the phone and whatever the problem was, she could correct it on her end. I didn’t freak out because I had her.”
Boothe enrolled in a silver-level plan that offers reasonable co-pays for her employees and is an improvement on the high-deductible policies they had under State Farm. “Now they have mammograms and preventative stuff without any out-of-pocket expense, which is huge for a single mom,” Boothe says. She will cover 100 percent of the cost of the policy and has decided to take the small business tax credit that will cut her cost in half. “The [NMHIX] site shows you what your tax benefit would be. I couldn’t believe it but I shot it over to my CPA and he confirmed it. I’m kind of impressed with the whole thing. I’ve been telling my clients who are small business owners to check it out.”
Feedback from early adopters like Boothe will prove beneficial as NMHIX improves its processes and can be instructional for other SHOPs around the country, says exchange spokeswoman Hammer. For instance, in January the SHOP will roll out a plan-comparison tool that will allow users to shop for insurance before having to complete the enrollment process, which includes agreeing to offer insurance to all employees. “People told us they were scared to push that button, or scared to put in their employees’ information. They needed to look through basic information first,” Hammer says. Having more than 50 coverage options under four New Mexico carriers also overwhelmed early users, something for future SHOPs to think about, she adds.