Covered California for Small Business continues to thrive

While the future of the Affordable Care Act, Medicaid funding, and Covered California are unclear, one program seems able to succeed: Covered California for Small Business.

CCSB had a rocky launch back in 2014, only enrolling a little over 14,000 employees and dependents, far short of the initial 90,000 projection. While enrollment is still lower than expected (33,029 in 2017), the program has continued to grow each year.

Over 2 million small employers provide health insurance to employees in California. While only 4,300 of those businesses used CCSB, the program provides greater choice for employers.

“It’s small, but mighty,” said Micah Weinberg, president of the Bay Area Council Economic Institute. “One of the things that gets missed sometimes is that even with minimal enrollment, the policies at Covered California for Small Business still move the market.”

CCSB has a competitor in California Choice, a private-sector insurance provider with almost ten times more members than CCSB (327,000) and a twenty-year history. But CCSB is the only program that offers employers a tax credit up to 50 percent of premium expenses.

CCSB has also helped to keep rate increases low as small businesses are no longer charged more than large businesses since health plans must offer the same benefits at the same prices both on and off the exchange.  After the ACA was passed, yearly rate hikes for small businesses were cut in half, from 10.4 percent from 2008 through 2010 down to 5.2 percent from 2011 through 2015.

Six insurance companies participating on the small business exchange: Kaiser Permanente, Health Net, Blue Shield, Sharp Health Plan, Western Health Advantage, and Chinese Community Health Plan. Kaiser holds the majority of members, with over 66 percent of enrolled members statewide.

While the House GOP tries to undo some of the ACA’s tax credits and subsidies and cut back on federal spending for healthcare, CCSB remains self-sufficient. Small businesses are charged 5.2 percent of premiums paid and CCSB uses the revenue to run the program, eliminating the need for federal funds, unlike Covered California or Medi-Cal. Although employers may choose other options if the tax credit incentive goes away, CCSB offers a great deal of choice to employers, and their employees.

Covered California’s enrollment continues to increase, not just for small businesses, and the three largest plans on the exchange (Kaiser, Health Net, and Blue Shield) all support CCSB. Add that to new technology upgrades, including streamlined enrollment and a new website expected to launch in the fall, CCSB appears to be in a strong position for the uncertain policy changes ahead.