Michigan Association of Health Plans

It’s time to fight the rising underlying cost of health care

This op-ed was written by MAHP Executive Director Dominick Pallone.

No one should have to choose between filling a prescription or buying groceries—yet that is the harsh reality that many Michigan residents face as health care – and in particular, prescription drug – costs continue to soar.

We know that the overwhelming majority of Americans—73 percent—are unhappy with the price of health care, according to a recent Gallup poll. Research conducted by the Kaiser Family Foundation in early 2019 found that nearly one in four Americans taking prescription drugs say it’s difficult to afford their medicines. An analysis of National Health Interview Survey data, shared in an AARP Stop Rx Greed campaign report, found that in 2016, 33 percent of Michigan residents stopped taking medication as prescribed due to cost.

The Michigan Association of Health Plans (MAHP) is concerned with this cost of health care—but meaningful change for Michigan residents won’t be found through “Cap the Copay bills.”

“Cap the Copay” bills don’t address the underlying issue. Capping copays will just increase premiums. It’s like squeezing a balloon with the cost moving into premiums. Employer-based insurance has increased 24 percent for families since 2013. Worse, the bills will further empower pharmaceutical companies to keep raising their prices. These trends are unsustainable.

Michigan’s health insurers are on the front lines of trying to hold down these costs. We are fighting for increased drug pricing transparency, so policymakers and public can better understand why pharmaceutical prices continue to grow. And we know those prices are going up. A Kaiser Family Foundation study released in October found that of the top 25 drugs covered by Medicare Part D, 20 of them had list price increases in 2016 and 2017 that were from three to nine times the rate of inflation.

Those are bills that have to be paid and are a major reason for major increases in insurance costs paid by insurers and rising co-pays for those covered.

Michigan Association of Health Plan members are supporting House Bill 5223, sponsored by Rep. Hank Vaupel, that would require makers of high priced drugs to file a report with the state showing the research and development and distribution costs, providing the same kind of transparency that is already being required of insurers, providers, hospitals and others in the health care system.

We also are trying to hold down costs by addressing surprise medical billing—the practice of billing a patient for seeking care at an in-network facility but receiving treatment or services from a provider that is out of network. Those “surprise” bills are often far higher than the cost that patients would be charged by an in-network providers. MAHPs priority one right now is getting the Surprise Billing package enacted this year. Every Michigander should be calling their legislator and demanding they vote for House Bills 4459, 4460, 4490, and 4491 now.

Prior authorization policies also try to hold down costs while ensuring patients get the treatments they need. Insurers maintain data bases that providers may not have, showing that lower cost treatments can provide effective care – and requiring “prior authorization” before insurers will pay for a higher cost treatment. It’s a small check and balance – but it’s a major cost containment and waste control measure for patient safety, waste, and affordability.

It’s easy to blame insurance companies for higher health care costs, but when costs go up, we have no alternative to increase our charges to customers, whether business, individuals ore government agencies for Medicare or Medicaid.

MAHP is dedicated to improving health outcomes for Michigan residents and fighting for lower health care costs – including on prescription drug prices – so that insurance can be accessible and affordable. Legislation that limits co-pays on prescriptions or prior authorization will led to higher insurance bills. We suggest a better way is to fight the rising underlying cost of health care itself.