No relief for small-group health insurance market

Businesses reeling from spiraling health insurance premiums can’t look for any immediate relief. Blue Cross Blue Shield of Michigan (BCBSM) says it expects double-digit increases to continue into 2003, both nationally and across the state.

The statewide premium increase for 2003 for the Blues’ area-rated small groups with under 100 employees is expected to average 22 percent (for groups that maintain their same benefits packages). Some areas will experience even higher rates, the Blues said.

“The increases are attributable to higher costs of medical services and prescription drugs, as well as continued deterioration of the Blues’ area community-rated pools, which are made up of small-group members and their dependents,” according to the Blues’ news release.

MRA joins reform coalition

Blue Cross Blue Shield of Michigan says there needs to be legislation to reform the health insurance market by addressing the growing imbalance in the small-group market.

MRA agrees.

MRA has joined the Coalition for Health Insurance Market Reform in working with the legislature to bring about small-group rating reform in Michigan.

“Michigan Retailers has been calling for reform and actively working toward it so that our members can continue to afford health insurance. We believe that working through the coalition of business groups is our best approach at this stage,” said MRA’s James P. Hallan, president and chief operating officer.

The Blues and the Coalition are seeking legislation that would prevent commercial insurance carriers from “cherry picking” good risks and avoiding bad risks through their pricing practices. By offering lower rates to younger, healthier individuals within small groups while offering higher rates to older, less-healthy individuals, carriers have left the Blues’ community-rated pools with a disproportionate percentage of higher-risk individuals. That drives costs—and premiums—up.