KANSAS CITY, Mo. -- The health insurance exchange launches on Tuesday, but not the exchange for small businesses. The Obama Administration says the health exchange for small businesses will not be ready to open for business Tuesday, October 1 as originally planned. But many small businesses won't even notice, because many haven't been doing anything to prepare for the new insurance exchange anyway.
One industry expert calls it the "ostrich effect," small businesses are sticking their heads in the sand instead of doing things now to prepare for the new insurance exchange. But he said small businesses need to start paying attention.
Jill Watson, CEO of KCMPA, a small business that works with independent physicians, says the rising cost of health care is already a burden for small businesses like hers.
"It's an enormous amount of money and as a start up who knows how long we can keep doing that," she said.
So she was looking forward to checking out her options on the Small Business Health Options Program, called the SHOP exchange, the federal government's website helps small businesses comparison shop for employee plans. That website has now been delayed for another month, but Watson said she knows many businesses haven't looked into the shop at all.
"It's easy to do because there's no information and the dates keep changing and unless this is something you look at all the time, it's easy to pay no attention to it," said Watson.
Troy Ross, President of the Mid-America Coalition on Healthcare, calls this the "wait and see approach." He said his organization did a recent phone survey of local small companies. He said 45 out of 48 businesses in that survey have done nothing to prepare for the healthcare exchanges.
"What that tells me is the fear of change exists, there is confusion in the market," Ross said, "I encourage everyone tomorrow to go to those health exchanges and start right away looking at what some of the opportunities may be for them."
Watson hopes it's a chance for her company to save money but said she understands why some employers may be hesitant.
"No one wants their employees to think they're experimenting with them and their lives in any way," she said. "So there's uncertainty and uneasiness when your employees feel like you're willing to do those experiments. No one wants to be the canary."
Watson also pointed out that a problem with pushing back the SHOP exchange until November 1 is that it doesn't give businesses much time to look into options, since they need to tell employees about their healthcare plans by January 1. She thinks many employers will just put off looking into the exchange until next 2014.