Year over year, we have seen dramatic increases in the price of health care, and in turn, health insurance. To combat these rises in cost, small business owners often need to increase deductibles and co-pays and defer a higher percentage of premiums to employees. As a result, it is becoming ever more difficult for small business owners to add and retain employees.
To focus concerns and prioritize the contemporary issues most important to small business owners, SBAM needed a robust, updated policy document. To address this, SBAM Board Chair Sue Tellier called for the creation of a member-staffed task force. This task force was designed to identify key areas of concern and to help author a new policy that suits current legislative realities, as well as determine the needs of small business owners as it relates to health care. Shannon Enders, veteran insurance broker, was appointed chair of the task force to lead the charge.
After a series of meetings, the findings from the task force are as follows:
Manage Costs
The ever-increasing costs of health care are directly responsible for the high deductibles and premiums that inhibit the growth of small businesses. As a result, the task force quickly identified managing costs of health care as the primary policy concern for small business owners. As the costs of health care increase in the future, the task force encourages policymakers to seek in- novative solutions to help lower health care costs by promoting flexibility, improving transparency and accountability, limiting mandates, and encouraging competition in the marketplace.
Promote Flexibility
As legislators discuss potential employee benefit mandates, it is vital that they avoid one size-fits-all mandates and allow insurance and benefit decisions to remain negotiable between employers and employees. Flexibility in employment conditions is a key competitive advantage for many small businesses.
The task force also found that the creation of a catastrophic insurance pool in both the individual and small group markets could help lower premiums, and that Association Health Plans can be used to allow small businesses some of the flexibilities enjoyed by larger businesses.
Improve Transparency and Accountability
Health care costs should be transparent. Employers and employees should be empowered and educated to shop with an understanding of the cost and quality of all available options. Improved transparency in the Pharmacy Benefit Manager (PBM) market, and further transparency requirements can help expose conflicts of interest and violations of industry ethics rules.
This updated policy also reaffirms a longstanding SBAM position in support of Michigan’s state-level Certificate of Need program as a tool to promote quality and prevent unnecessary spending, which is needed because the health care market does not represent regular market conditions.
Limit Mandates
Unnecessary and burdensome mandates are one of the primary drivers of increased costs in care and insurance. While there is no expectation of completely lifting regulations and mandates in the health and insurance space, a restrained approach will lead to lower costs for employers and employees.
Encourage Competition
A growing number of large hospital mergers have generated concerns about vertical integration and market consolidation creating barriers to competition. In cases where hospitals own their own health plans, when large health systems merge, when private equity firms buy up or consolidate specialty practices, or when health systems buy physician practices, SBAM supports policies that promote a competitive marketplace and educate consumers.
As pharmaceuticals represent a larger percentage of overall health care costs, policymakers must support innovative solutions to help reduce drug costs, including increased utilization of generics and biosimilars, streamlining the process of bringing new pharmaceuticals to market, and preventing drug companies from manipulating patents to suppress competition.
To read the full SBAM Health Care Policy Task Force report, as well as view other positions, please visit the advocacy section of our website.
By Jacob Manning; originally published in SBAM’s March/April 2024 issue of FOCUS magazine
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