The House Health Policy Committee last week began hearing testimony on legislation to add another mandated health insurance benefit to the books, a la Obamacare. The Michigan Chamber testified in opposition to this legislation because it will only add to the difficulty that small- and medium-sized businesses face in affording health insurance benefits.
Despite widespread opposition from the business community and health insurers, the Committee Chair (Rep. Haines, R-Waterford), who is also the bill sponsor, continues to push to vote to the bill out of Committee on December 3.
House Bill 4751 would mandate "cost parity" for chemotherapy treatments. 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 could result in some cancer patients paying higher out-of-pocket costs for their oral chemotherapy drugs. This is because:
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.
- 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.
- The bill 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 and does nothing to change the underlying price of the drug, it simply shifts the remaining costs to the employer.
- This legislation will result in some enrollees paying higher out-of-pocket costs for oral chemotherapy drugs. This legislation is based on an incorrect assumption that patient out-of-pocket costs are higher for pharmaceutical benefits than medical benefits. However, comparisons of the most common plan designs in Michigan reveals that this legislation will act to increase the overall cost that many cancer patients pay for his or her chemotherapy.
We will continue to voice our opposition to piling on more government-imposed health insurance mandates. This proposal wrong answer at the wrong time and, in this case, could ultimately increase costs for many cancer patients. Please contact Wendy Block at (517) 371-7678 or email@example.com with any questions.