Untold Story of Small Biz Delay under ACA, Just Déjà Vu from Massachusetts

The revelation that the Obama Administration will delay the roll out of the “choice option” for small business until 2015 came as a huge surprise to many, including Joe Klein at Time, however anyone familiar with the Massachusetts experiment will feel a strong sense of déjà vu. In a 2010 paper I authored for the Heritage Foundation, I documented the delayed and failed effort by the Massachusetts public exchange (Connector) to offer real choice and savings to small businesses.

My report suggested the experience served as a warning to other states. I suppose I should have targeted it toward the federal government instead. Small companies should be even more uncertain of the law now that the cost–saving mechanism they were sold is now on the back burner. Yet the penalties for not offering insurance, new taxes on fully-insured plans, and EHB requirements all remain on schedule.

Background: Governor Romney’s orig­inal health reform proposal envisioned a statewide health insurance exchange that would have offered small businesses a robust choice of plans with a wide range of deductible and benefit levels. His proposal provided for defined contributions from employers, used the exchange as a “premium aggre­gator,” and created a pooling mechanism to allow employees of small businesses to purchase group insurance together to spread risk and provide greater premium stability.

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