MRA supports health insurance reform

The Michigan Retailers Association, along with dozens of Michigan business associations and chambers of commerce, supports legislation in Lansing to implement rating reform for Michigan’s small business health insurance market.

A serious defect in the small group market is driving up premiums for businesses with Blue Cross Blue Shield coverage and making health insurance unaffordable for all small businesses, except those with the very youngest and healthiest employees. Commercial insurers can, in essence, select which businesses they’ll cover by offering younger, healthier groups very low rates and by offering older, sicker groups very high rates.

Because today the Blues alone must accept all and offer an average community rate, older and less-healthy groups migrate to Blue Cross and businesses with Blues coverage are left to pay dramatically rising health insurance premiums.

As part of the Coalition for Health Insurance Market Reform (CHIMR), the Michigan Retailers Association supports legislation to reform Michigan’s small group rating rules based on recommendations of the National Association of Insurance Commissioners. It’s significant that 47 other states have already implemented NAIC-style reform and it’s time for Michigan to do so.

Reform that sets uniform rating rules for all insurers would prevent commercial insurers from skimming the very healthiest groups away from Blue Cross, thereby spreading risk more equitably among insurers and stabilizing rates for all small businesses.

We support NAIC-style reform in the form of “rate bands,” which would have insurers select a range of rates that they offer small businesses. The proposal also prevents insurers from dramatically increasing a business’s rate upon renewal or when one of its employees gets sick—practices that are contrary to the very spirit of insurance.

We urge you to contact your state legislators to let them know you support small-group market reform to bring stability to small business health insurance rates. You can find your legislators and send them an e-mail or letter by visiting the CHIMR Web site at www.chimr.org. The site features e-mail addresses, phone numbers and mailing addresses for all Michigan legislators, as well pre-drafted letters and talking points on the issue.