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Health Care Mandates A Bad Idea
Doing so, he said, will result in choice being taken away from employers, will raise the cost to cover employees, will mean fewer workers will get covered, will open the floodgates to other required coverages, and will inhibit the development of new plans.
“We think mandates are a bad idea because these increase the basic package of benefits allowed, which ties employers’ hands,” said Steven Heacock, vice president of development and general counsel for Priority Health, a managed care company that serves nearly 5,000 employers in western and northern Michigan.
“It just increases the cost of HMO coverage,” he added. “And by increasing it, of course, you decrease the access people have to insurance because fewer and fewer employers can afford to provide it.”
Prior to the end of the legislative year, members of the state House and Senate passed a pair of measures that will affect the health care plan an employer can offer workers, if Gov. John Engler signs both into law.
One measure would require employers to buy supplemental insurance if they wish to offer coverage for elective abortions. The other would require insurers to include coverage for diabetes drugs, supplies and education as part of the basic plan that employers purchase.
As far as Priority Health is concerned, requiring a supplement for abortions won’t affect the company’s offerings to employers. The firm only provides that coverage as a rider.
“Employers already pay separately for that benefit. It is not part of our basic benefit,” said Heacock.
But the mandate for diabetes coverage could have different ramifications for Priority.
“There is not a single thing in that diabetes bill that we don’t already do,” said Heacock. “But what it does is, it adds administrative costs.”
For example, Heacock explained that the bill requires HMOs to pay for educational seminars for members who have diabetes. Priority Health does that now, through the hospitals that are part of its network. But the bill, Heacock said, requires that the seminars be conducted by a “certified educator,” and he isn’t sure what that means.
“It may be that we may have to use somebody that the state knows, is contracted with, or maybe some new business that is starting out, instead of the hospitals that are already in our network. So it may add cost and hassle,” he remarked. “There is also some reporting that is additional, so that adds some administrative cost.
“But it doesn’t add at all to the benefit that our members will get,” said Heacock. “It may add cost because of the increased administration of it.”
It’s too early for Heacock to estimate how much more the diabetes bill could cost the company and, in turn, its clients. If Engler signs the bill, the state will have to clarify certain items, like the certification matter, through regulations. Until then, Heacock said Priority would conduct business as usual because the firm feels that it already complies with the bill.
“We know we have a good system that works,” he said. “But whether we will meet their certification is another question.”
One thing, though, is clear to Priority – the diabetes coverage is seen as a mandate, and surprisingly so because it comes from a Republican-controlled government. The company’s fear is clear, too. If diabetes coverage can be required, what comes next?
“The Legislature and the governor have been very good about saying no to mandates. They have now opened up the gate. And, so as you might guess, every group that has an interest in a particular health malady is lining up,” said Heacock.
If the bill is signed into law, Heacock feels that lawmakers will then hear from advocates of mandatory coverage for mental health and substance abuse, and for other services like chiropractics and acupuncture, among others.
“Basically, the state to date, at least under Republican control, has said no mandates because we’re concerned about an employer’s ability to pay. Well, I think they should be concerned that suddenly the floodgates might be open,” said Heacock.
“How do you say to somebody with a chronic mental illness that yours doesn’t count and diabetes does,” he offered. “It’s very difficult to draw the line now.”
Heacock raised another issue that would arise from a coverage mandate.
“When they tell us what we have to do for diabetes, it means we can’t take the next step when it’s developed. We can’t develop a new program that might be better because, under law, we’re required to provide this program that they’ve defined,” he said. “So, to me, the Legislature just shouldn’t be in the business of mandating specific coverages.”