Health Market Reform More Important Than Blues

May 13, 2002
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Rome is burning for small businesses.

And unless lawmakers step up now to put out the fire, small business owners will continue to see scorching increases in the health insurance premiums that are already threatening their livelihood. The fifth year of double-digit health insurance premium increases is no less a concern to Michigan’s large and mid-sized employers, but such hikes are now forcing smaller operations to consider eliminating or reducing health insurance coverage for employees, according to surveys among members of the Small Business Administration of Michigan. A recent survey by the Grand Haven Chamber of Commerce showed that employers in Ottawa and Muskegon believed health care insurance is the No. 1 economic issue. The Michigan Retailers Association surveys showed some businesses would be forced to close under the weight of the double-digit hikes.

Against the backdrop of Small Business Week last week Michigan legislators introduced a proposal to address market reforms, but tied it directly to reforms in law governing Blue Cross Blue Shield of Michigan.

Legislators, however, must start with the portions of the legislative package that reform the health insurance market in Michigan (and would enable the Blues to better compete with commercial carriers) and bring desperately needed relief to skyrocketing health premiums.

We can debate until the end of time the pros and cons of how Blue Cross Blue Shield of Michigan conducts business. We can talk all we want about whether the Blues’ board of directors (in the view of Gov. John Engler in his State of the State address back in January) is a bloated, self-serving group that’s been fiddling away as a health insurance crisis evolved in Michigan.

And none of it would really matter for the small businesses counting on our legislators for help.

Yet to look at the proposal one wonders whether it can happen, especially amid the backdrop of election-year politics that will bring a new governor and numerous new legislators into office in January.

Engler and Insurance Commissioner Frank Fitzgerald are insistent that changes within the Blues board of directors are needed for any true and effective reform to occur. The Blues say that only market reforms are needed and that everything inside is just fine. With the two sides apparently headed toward an old-fashioned legislative stare down, we share the fears of the Small Business Association of Michigan that much-needed market reform may get lost in the political battle over Blues reform.

SBAM Vice President for Governmental Affairs Barry Cargill also noted that market reform would create common rules for all insurance carriers on how health insurance rates are set. That in turn, he emphasizes, will lure new competitors into the marketplace and provide small businesses in Michigan more options for health insurance.

The Blues also have pushed for such reforms, for more than three years.

While Fitzgerald and Engler consider the legislation introduced to be all-inclusive, likening it to a three-legged stool, it is apparent that market reform is the “big picture,” not the issues of governance of a single insurance carrier.

The sirens are wailing for small business. Michigan needs some real firefighters, not politics as usual.  

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