You can be on Entrepreneur’s cover!

The Latest Surprise About the Obamacare Health Exchanges A new study finds a money-saving reason businesses should keep their eye on the new government exchanges.

By Linda Lacina

entrepreneur daily

According to a new report released today, average premiums offered on the new individual government healthcare exchanges are comparable to and sometimes less than their employer-sponsored counterparts.

The data might intrigue business owners grappling with rising health-care costs and changes related to 2010's Affordable Care Act. In 2017, states will have the option to open exchanges to companies with more than 100 employees. If patterns continue, exchanges could be a viable alternative for employers in coming years.

The study, conducted by PwC's Health Research Institute, reviewed insurance policies from 15 state exchanges and the District of Columbia, as well as exchanges run by the government in any remaining states. Data from median and low-cost premiums were then compared to survey data of employer-sponsored premiums from 156 million people in 2013.

Government exchange plans offer four plan levels: bronze, silver, gold and platinum, paying 60 percent, 70 percent, 80 percent and 90 percent of an individual's healthcare costs, respectively. Employer-sponsored plans typically pay around 85 percent of a person's healthcare costs, making the average employer-sponsored plan the counterpart of gold or platinum exchange plans.

According to the study, "across the board, at every level, average exchange premiums are lower than this year's average premiums for employer-based coverage." Researchers found that the average median premium gold plan was 8 percent lower than the national average employer premium. The average of the lowest premium for gold plans was 27 percent lower.

Not factored into this analysis were subsidies that employers offer to offset costs or federal tax credits for which a majority – 85 percent -- of enrollees to Obamacare are eligible.

Of course, there are some important differences to note. Exchange plans often have limited choices for doctors and hospitals and much narrower provider networks. Also, the data from this study examines rates from the government exchanges' first year and it's not known if these patterns will continue.

Additionally, to be a true alternative, the government's business exchanges would need to be robust. Currently, Obamacare's business exchanges offer few plan options, though that's expected to change in 2015.

Still, if patterns continue, exchanges might give businesses a viable alternative that helps control costs. As the study notes, exchanges, "may provide an opportunity for employers to reexamine new approaches to providing health insurance coverage for their workers."

Linda Lacina

Entrepreneur Staff

Linda Lacina is the former managing editor at Entrepreneur.com. Her work has appeared in the Wall Street Journal, Smart Money, Dow Jones MarketWatch and Family Circle. Email her at llacina@entrepreneur.com. Follow her at @lindalacina on Twitter. 

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.

Business Solutions

Save an Extra 20% on the Ultimate Microsoft Bundle Featuring Windows 11 Pro, Office, and More

Pick up this package of popular Microsoft products for only a fraction of the price through April 16.

Business News

This Fan-Favorite Masters 2024 Item Is Still $1.50 as Tournament Menu Appears Unscathed by Inflation

The pimento cheese sandwich is a tradition almost as big as the tournament itself.

Business Solutions

Visualize Data for Better Business: MS Visio is $23.99 Through April 16

Set your team up for success with a reliable tool for creating organizational charts, diagrams, and more.

Business Solutions

Scan Easier and More Affordably with This 20% Discount

iScanner is a mobile app that makes document management, editing, and sharing easier.

Science & Technology

These Are the Top 6 AI Threats to Your Business Right Now

The modern workforce is forever changed by artificial intelligence. If you fail to understand that we will all need to learn AI to some degree, you haven't been paying attention.