October 9, 2014 by Tony Novak
I was disappointed to read in today’s Wall Street Journal that the new streamlined online application process for individual health insurance is not scalable to privately branded enrollment portals for 2015 coverage. Ironically, these private enrollment portals are mostly for employees of small businesses specifically designed as a convenience to employees to make enrollment and premium payment easier and to integrate primary health insurance with other employer-sponsored benefits.
In the long run, private exchange web portals may have more impact on enrolling Americans for primary health coverage than anything else the government does through Healthcare.gov. Also ironic, the executive that announced the limited use of new technology by Healthcare.gov is a former VP of United Healthcare/Optum. One of the major providers of private portal enrollment is United Healthcare.
Without the use of these private exchange portals, employees do not have access to the convenience of payroll-deducted individual health insurance or employer-paid contributions to those individual health insurance premiums.
After an investment of more than a billion dollars over 4 years, Healthcare.gov will be ready to process more than 5 million individual insurance applications this fall. Most of the users this fall will be people returning to update coverage for applicants where some or all of the cost is subsidized by an advance tax credit. Critics say this technology works out to an additional taxpayer cost of more than $100 per user for a web site that primarily used to give out public aid of thousands of dollars per user.
There is a separate insurance exchange planned for small business called SHOP but it is not available in most states yet and may never be a significant source of small business coverage. Although this type of group insurance coverage may be offered to employees on a pre-tax basis, the disadvantages outweigh the tax benefits for many companies.