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.