Michigan business organizations today announced their opposition to House bills 4346 and 4354, key pieces of a House healthcare package that would mandate a limit on out-of-pocket expenses but raise health insurance premiums that are already a heavy burden for many businesses.
Leaders of the Michigan Association of Health Plans, Economic Alliance for Michigan, Small Business Association of Michigan, Michigan Chamber of Commerce, Detroit Regional Chamber, Grand Rapids Area Chamber of Commerce, National Federation of Independent Business and General Motors joined in a coalition, the Michigan Affordable Healthcare Coalition, to express their concern that the legislation will lead to businesses deciding to drop coverage due to higher premiums it will create.
“These bills will increase health insurance costs which are always cited by small business owners as one of their top concerns. With many small businesses struggling to emerge from the pandemic, now is not the time to add pressure to struggling small businesses” said Scott Lyon, senior vice president for the Small Business Association of Michigan. He estimated the bills will cost an additional $57 million in insurance premiums paid by Michigan small business owners. “We know that only about a third of businesses with fewer than 50 employees provide coverage today and we know that premium cost is the reason behind that. These bills will mean more of those companies will face the difficult decision of cutting off insurance for their workers.”
Wendy Block, Michigan Chamber of Commerce vice president of business advocacy and member engagement, said the bills won’t cut the costs of prescription drugs, just force Michigan businesses and other entities to pay more. “When the Legislature puts caps on the out-of-pocket expenses for pharmaceuticals like insulin and oral chemotherapy compounds, the cost of the drug doesn’t go down. The cost is just shifted over to employers to cover,” she said.
Bret Jackson, president of the Economic Alliance for Michigan, a group of businesses and union working to control health care costs, said these bills run contrary to earlier efforts by the Legislature to control insurance premiums. “When the Legislature has increased mandates in the past, we’ve seen health insurance rates go up. It just seems contrary for a Legislature that recently took great steps to control the cost of insurance premiums for auto insurance to now decide to increase costly government mandates on small businesses who pay health insurance premiums for their employees.”
Detroit Regional Chamber Government Relations Director Matt Patton said the bills will make Michigan less competitive and attractive to new business. “Making healthcare more affordable is a worthy goal, but this current package – while very well-intentioned – would have the opposite effect,” said Patton. “Squeezing the balloon of healthcare costs onto employers and employees makes it tougher for them compete while carrying the already heavy weight of this pandemic, that despite the feel of Spring, has not ended.”
Dominick Pallone, executive director of the Michigan Association of Health Plans, said that neither of the bills addresses the underlying issue of increased drug costs driving up the cost of health care and insurance premiums. He also noted that many Michigan consumers may be misled by the bills.
“This legislation cannot affect the many Michigan residents whose employers are self-insured and regulated by federal law, or those on Medicare and Medicaid – more than 75 percent of state residents,” he said. “But real action to control the cost of pharmaceuticals would help all consumers without raising premiums. Increasing transparency and competition is the right path, not government mandates that impose new costs on small businesses.”
The coalition has set up a website, www.MichAHC.com, with more information about the bills and how the public can contact their state lawmakers about the legislation.