As the second anniversary of the federal Affordable Care Act approaches, the Oregon legislature delivered a nice present for Oregon small business owners and their workers: legislation advancing the Oregon Health Insurance Exchange.
Oregon was already planning a health insurance exchange — an online marketplace for coverage — when Congress enacted the Affordable Care Act two years ago. The federal legislation has boosted Oregon’s efforts, providing start-up funding and delivering important consumer safeguards.
Why is the exchange, set to launch in 2014, so important? Because it offers a way to rein in soaring health coverage costs plaguing small businesses and individuals.
In 2010, it cost Oregon employers about $5,200 on average to insure one worker. When you account for inflation, that’s a 66 percent hike over the amount a decade earlier.
The costs of coverage have been particularly hard for Oregon’s small businesses to manage. Small Oregon firms are less than half as likely to offer coverage to their workers as are larger firms.
That’s a serious problem, given that small businesses employ a growing number of Oregon’s workers. Indeed, small businesses’ coverage woes account for a good portion of the recent declines in health insurance coverage in Oregon.
Most small business owners, of course, want to do right by their workers. They also want coverage for themselves. And they want to compete with larger firms for talented workers.
Fortunately, Oregon’s health insurance exchange should lower costs for small businesses in several ways. First, by enabling small businesses to join together to press for a better deal, the exchange should result in more competitive prices. Second, under the new laws, small businesses will be able to reduce the paperwork and costs of administering benefits. And third, the exchange will offer simplified plan options, making product-comparison easier.
At the same time, the Affordable Care Act will protect small businesses in other ways. Starting in 2014, insurers won’t be able to charge more just because some workers get sick and need care. For sole proprietors buying coverage for themselves, insurers won’t be able to deny coverage or charge more for a pre-existing condition, as they can now.
The changes on the way come on top of the benefits that the Affordable Care Act is already delivering. For example, one of those benefits is a tax credit for the smallest firms to help them purchase coverage for their employees.
According to one estimate, the Affordable Care Act — principally through the insurance exchanges — will lower health care costs for small businesses by up to 12 percent.
Together, the Oregon Health Insurance Exchange and the Affordable Care Act will bring tangible benefits for Oregon small businesses: cost-savings that add to the bottom line and a happier and healthier workforce. What employer wouldn’t love that?