by Scott McClallen
A health care reform package the House passed Wednesday is creating a rift between the state’s business groups and the GOP.
Michigan business leaders formed a new Michigan Affordable Healthcare Coalition that aims to reduce health care costs without raising costs on small businesses.
In a Thursday afternoon press conference, business leaders voiced opposition to House bills 4346 and 4354, claiming they would raise health insurance premiums that are already a heavy burden for many businesses.
HB 4346 would require an insurer that delivers, schedules or renews a health insurance policy covering prescription insulin drugs to cap the total cost at $50 for each 30-day supply.
HB 4354 would prohibit a health insurance policy from applying financial requirements to orally administered anticancer medications that are more restrictive than the financial requirements it applies to intravenously administered or injected anti-cancer drugs.
Speaker Jason Wentworth, R-Clare, acknowledged the opposition in a Wednesday news conference.
“There are some of these stakeholders that are just never going to be supportive,” Wentworth said. “And if they are supportive, I think that should raise a red flag. These bills need to be strong and they need to be aggressive in order to truly drive down costs.”
Scott Lyon, senior vice president for the Small Business Association of Michigan, said less than 30% of businesses nationwide with 50 or fewer employees can afford to offer insurance benefits. If enacted, these bills would drop that number even more, he said.
Lyon described the bills as “the straw that broke the camel’s back,” presenting another hurdle for small businesses owners fighting to survive during government-mandated COVID-19 restrictions.
“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” Lyon said.
Lyon 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,” he said. “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 will only force Michigan businesses to pay more, instead of cutting costs.
“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,” she said. “The cost is just shifted over to employers to cover.”
Block said the bills “amount to government price controls and unwanted government interference in private contracts.”
Detroit Regional Chamber Government Relations Director Matt Patton warned 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,” Patton said. “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 neither bills addressed the underlying issue of increased drug costs driving up the cost of health care and insurance premiums.
“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% 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 health care package is currently in the Senate.
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Scott McClallen is a staff writer covering Michigan and Minnesota for The Center Square. A graduate of Hillsdale College, his work has appeared on Forbes.com and FEE.org. Previously, he worked as a financial analyst at Pepsi.