Health-care crisis requires solution

by James P. Hallan
MRA President and Chief Operating Officer

The rising cost of health care is creating a crisis for Michigan retailers. Over the past three years MRA members have seen double-digit annual increases in health insurance premiums. MRA has conducted an aggressive search for cost-saving alternatives, but comprehensive solutions have been elusive.

Last month we announced a new health-insurance partnership with Michigan Farm Bureau that would cut costs for many sole proprietors, who have been dealt the most exorbitant rate increases. At the same time, however, forces were coming together in state government and among Blue Cross executives to produce a groundswell of support for wide-ranging reform of the Blues and the health insurance system in this state.

Faced with this window of opportunity, MRA has decided to throw its full weight behind the efforts at market reform that are now underway. As a result, MRA’s new health plan has been placed on hold so the Association can concentrate on taking part in the emerging dialogue on this issue.

Health insurance reform is absolutely critical. The system is under great stress and will implode without major changes.

There are a number of reasons for the crisis. The aging of America’s population is leading to an increased need for health care. MRA’s group, in fact, is older than the average for Blue Cross.

No matter what their age, Americans are increasing their use of prescription drugs. This growing utilization is fueled in part by mass advertising of expensive new drugs. As a result, drug costs are rising rapidly for insurers, driving up insurance prices.

The structure of Michigan’s health insurance system exacerbates the problem. Blue Cross is required to insure anyone, while other carriers can draw off the least-risky customers by offering lower rates, leaving Blue Cross to pick up the slack.

Business owners and their employees have the right to expect the best health care in the world. Naturally, there is a price tag attached. But small businesses simply can’t absorb 40 percent annual increases in health insurance premiums and continue to survive in an increasingly competitive retail environment.

As the reform process unfolds, competing reform proposals will be put forward. Governor John Engler has already proposed one set of changes, while the Blues have presented an alternate plan. MRA will speak out for the needs of businesses, consider the options proposed and work for a solution that’s in the best interest of our members.

At this point it’s essential that members make their voices heard on the need for market reforms. I encourage you to contact legislators, especially the nine representatives on the special House committee created to address this issue, and let them know how rising health insurance costs are affecting you, your employees and your business.

Though your Association would love to have an immediate resolution to this problem, we believe a complete overhaul of the system is much more important than a temporary fix. We will not pass up this chance to make lasting changes that will benefit our members and all Michigan residents.