Home » Blog » April Exchange Board Meeting: SHOP Exchange

April Exchange Board Meeting: SHOP Exchange

After some delay in the open session, which was indicative of the amount of work that the Board members face, April’s Exchange Board meeting focused on the Small Business Health Options Program (SHOP), with a panel discussion.

During his Executive Director update, Peter Lee announced that the Board received a report on the CalHEERS contract status, and noted that negotiations have yet to be finalized.  New staff appointments were also announced, including Gary Cohen as the General Counsel, Tien Lam as the Deputy Director of Eligibility and Enrollment.  The Board also announced its approval of a non-competitive bid awarded to Milliman to look into rate trends and its impact on QHPs.  David Panush summarized noteworthy state legislation and federal regulatory updates.

The rest of the meeting largely focused on the SHOP, with an expert panel consisting of Sandra Hunt from PricewaterhouseCoopers, John Grgurina on the PacAdvantage experience, John Arensmeyer from the Small Business Majority, Roxanna Bautista from the Asian & Pacific Islander American Health Forum, and Dan Webb, the former president California Association of Health Underwriters.

Of particular interest was John Grgurina’s presentation on what SHOP can learn from PacAdvantage’s experiences.  Highlights include:

  • The small business market is very different from the individual market, which has greater value proposition thanks to aggressive federal subsidies. Employers also have a greater range of financially comparable choices outside of SHOP.  Contrary to the individual market in the Exchange, SHOP plans may not be the cheapest option.
  • Plans fear cannibalization.  They currently control entire small/large groups themselves, but participation in SHOP will most likely fragment their groups due to the options available to consumers.
  • The Exchange will not have as much power over plans in the employer market as people think, since employers can find competitive group plans outside of SHOP.
  • SHOP must therefore be competitive, and will require aggressive sales and marketing, as well as unparalleled customer services.
  • Strong, positive relationships with agents, brokers and health plans will be critical to the SHOP’s success.
All meeting materials are available online; the next Board meeting will be on May 15, 2012 in Sacramento.

Tags: , , ,