Michael Lujan, Director of Sales and Marketing for Covered California’s SHOP, resigned today. A spokesman for Covered California said Lujan will leave his position Aug. 9th. Lujan is expected to release a statement later today and we will continue to provide updates as they become available. Michael was the de facto voice of the exchange for agents. He will be greatly missed.

Anthem withdrew its application to be on the Small Business Health Options Program (SHOP) last week. It was a surprise move that leaves the SHOP as wobbly as a three-legged chair. Without Anthem Blue Cross, the SHOP will be decidedly less attractive to employers and agents. Anthem is the major insurer in the California small group market with about one-third of the market and even if it wasn’t, you’d still want as broad a range of carriers as possible for the SHOP to have a successful launch year.

California Choice Benefits

The Anthem announcement included the not so subtle reminder that they are a participant in California Choice, a privately owned small group exchange that has operated successfully in state for a decade or more. Indeed, California Choice, the SHOP’s only competitor, seems to be the winner here.

Originally, Covered California required insurers to participate in SHOP as a condition of being on the individual exchange, but they had to remove that requirement to attract new insurers. Relatively small plans like Alameda Alliance for Health, Chinese Community Health Plan, Contra Costa Health Services, and L.A. Care Health Plan lack the resources to field small group plans in the SHOP, but their participation in the individual exchange is desirable.

DOI Attacks

Anthem had been under fire from DOI Commissioner Dave Jones for a series of recent small group rate increases that he considers excessive. Without the legal power to stop the rate increases, jones has been scorching Anthem in the media and lobbying the Exchange Board to exclude Anthem from the SHOP. Whether the board would have done that remains a moot point since Anthem has taken that chip off the table.

The Obama administration delayed for one year a provision, commonly known as the employer mandate for one year, that calls for businesses with 50 or more workers to provide affordable health insurance to workers or pay a $2,000 fine per employee. The employer mandate will now go into effect on January 1, 2015.

This delay is not expected to have much of an impact on the majority of large employers as most provide health benefits now. It will give those with a large number of part-time and low-wage employees more time to get their ducks in a row.

Creates New Subsidy Grey Area

However, Tuesday’s ruling does create a grey area for individuals. According to a recent IRS ruling, only those people not offered affordable coverage at work will qualify for subsidies through the Exchange, but since employers won’t be required to offer it, or report who they are covering, it is unclear how Covered California or the IRS will know who is eligible.

If fewer employers offer coverage, and more workers go through Covered California in the first year, and employers see their workers the employees are more or less happy with the arrangement, more businesses might simply decide to pay the penalty in 2015 rather than the substantially higher cost of covering their workers.

Official Response

State Insurance Commissioner Dave Jones said that the Obama administration’s decision “will not have a long-lasting effect, nor does it undermine the overall effectiveness” of the ACA. Anne Gonzales — spokesperson for Covered California — said that the decision will not affect the timing or the content of policies offered through the exchange.

David Lazarus, an LA Times columnist, frequently writes about what’s wrong with our healthcare system. But he got an appreciation for what’s good about it recently when his wife had a seizure. The following is reproduced from his article.

“My wife had a seizure a couple of weeks ago after the sodium level in her blood dropped dangerously low. She’s now home after spending eight nights in the intensive care unit at UCLA Medical Center….”

“First, it’s hard to imagine any other healthcare system in the world that can marshal as many resources as ours. From highly skilled doctors and nurses to every possible medical device and drug, our system is second to none in its capabilities. No wonder that when foreign leaders fall sick, they often seek treatment here and not at home.”

“Moreover, once you’ve gained access to the higher levels of the system — admittedly, no small feat — there’s seemingly no limit to efforts that will be made to heal you. Every possible test will be run. Every expert opinion will be sought.” Click here for entire article. U.S. health system has flaws, but not in quality of care.