Last week, the Senate Insurance Committee advanced legislation to the full Senate to add another mandated health insurance benefit to the books, a la Obamacare. Senate Bill 625 would mandate "cost parity" for chemotherapy treatments and place a $100 cap on out-of-pocket expenses for high-cost, specialty drugs. The Michigan Chamber opposes this mandate.
Although we are sympathetic to those with challenging medical conditions, this legislation is ill-conceived, as it amounts to government price controls, interference in private contracts and will result in higher health insurance premiums for employers.
The Michigan Chamber will be reminding Senators that:
- All health plans in the state of Michigan are already required to cover all chemotherapy treatments (oral chemotherapy drugs and intravenous [IV] chemotherapy medications) under Michigan law. This legislation would take Michigan’s mandate one step further by imposing limits on how health plans administer benefits for oral chemo drugs and IV chemotherapy medications.
- SB 625 is a clear example of government price controls. Oral chemotherapy drugs and IV chemotherapy medications have very different costs. If the Legislature sets an arbitrary limit on the patient’s portion of these costs (i.e., a $100 cap on out-of-pocket expenses) and does nothing to change the underlying price of the drug, it simply shifts the remaining costs to the employer in the form of higher premiums.
- The legislation will result in higher health insurance premiums at a time when costs are already rising due to medical inflation and the various mandates in Obamacare. As a result of these increases, many job providers may be forced to increase co-pays and deductibles – or stop offering health insurance coverage altogether. Given that the federal ERISA law exempts self-insured groups from state mandates, the legislation will only apply to small- and medium-sized firms, generally firms with fewer than 100 employees.
- Out-of-pocket costs are already limited under the requirements of the Affordable Care Act. Each plan in the four benefit categories have corresponding limits on benefit costs (Bronze is limited to 40%, Silver is 30%, Gold is 20% and Platinum is 10%). Many individuals will qualify for further reductions in out-of-pocket costs based on income.
- Approving a cost mandate for oral chemo drugs opens the door for a wave of new insurance mandates for other specific diagnoses (e.g., multiple sclerosis, diabetes, rheumatoid arthritis, Alzheimer's disease, etc.). If the Legislature approves this, they open a Pandora’s Box of health insurance mandates and send a clear message that Michigan is willing to pick winners and losers in health care access and affordability.
While many lawmakers and others have undoubtedly been touched by cancer, piling on more government-imposed health insurance mandates is the wrong answer at the wrong time.
Please contact Wendy Block at email@example.com with any questions.