With the cost of health insurance premiums continuing to rise each year, small businesses must consider passing the costs to their employees, cut benefits, increase deductibles or no longer offer health care.
During the past three years, the base rate has increased by 9.7 percent for small groups and 8.1 percent for large groups, while some businesses received increases of 26 percent or more.
In May, the three largest private insurers in the state requested premiums increases for small and large groups, which would be implemented in January 2013.
For small groups, Blue Cross Blue Shield of Rhode Island filed the lowest requested change at 2.3 percent, followed by Tufts Health Plan at 6 percent, and United HealthCare at 6.2 percent.
Stephen C. Boyle, president of the Greater Cranston Chamber of Commerce, said these types of increases are unsustainable.
That’s why the chamber, along with the Health Insurance Small Employer Taskforce, held a forum with state Insurance Commissioner Christopher F. Koller last Thursday to voice their opinions about proposed health insurance rates.
At the forum, held at the Garden City Center at 100 Midway Place, Koller noted that Rhode Island isn’t the only state with cost challenges.
“If misery loves company, employers should know they are not alone,” Koller said. “But we need things that we can do in Rhode Island that are different because of our size.”
Koller, who is the sole insurance commissioner in the nation, said it’s important to think of medical care as a system that different people need different things from. He pointed out that it’s essential for employers to hire healthy, able-bodied workers too.
Further, he said people often approach him and offer a “simple solution” to the problem, which typically involves bringing in additional insurers to solicit competitive prices. There isn’t any evidence, said Koller, that adding more insurers to the mix reduces costs.
He also feels it’s crucial to pay attention to states that have lower costs.
“There are communities that have shown us how to do it,” Koller said. “They are trying to look at things as a community – they are not looking at things as a set of individual purchases.”
He continued, “This is a long haul and we’ve got to keep working at it. If we want our costs to be lower, we are all going to have to commit to change. I can’t be like President Obama who says, ‘If you like your health care, you can keep it.’ We can do this. But we all have to give up some stuff as we go along.”
Raymond B. Sepe, president and CEO of Electro Standards Laboratories and former president of the Cranston Chamber, was one of nearly 40 people at the assembly. He suggested grouping Rhode Island, Connecticut and Massachusetts to seek a regionalized rate.
“Keeping the cost down comes naturally if you have more competitors,” Sepe said. “I do not really believe that having more [insurers] will cost more if you have regionalization. Competition makes the pricing go down.”
Again, Koller said he views it as something that wouldn’t be profitable to employers.
“We’re going to have to figure out how to pay our doctors differently to take care of the chronically ill folks so that they don’t make money by bringing [someone] in every time for a visit,” he said. “That’s why I’m doubtful.”
Cranston business owner Michael Colasante thinks the problem has the potential of becoming bigger if the government continues to be involved. The solution to efficiency, he said, is to get government out of the picture.
“As soon as the government got involved, the costs started skyrocketing. It’s like two shackles around our ankles and it keeps pulling us back farther and farther,” Colasante said. “If you don’t change the moral structure of what’s happening, you’re not going to change anything. If you take the government out of the equation, everybody becomes more efficient, there’s more competition, we’re able to go over state lines and buy insurance. Everybody looks to the government for solutions, but it is the biggest problem that we have.”
Others agreed and disagreed, with Warwick business owner Ted Almon saying, “Business people want solutions [and] it will never get fixed until the government fixes it.”
No matter a person’s position, Marti Rosenberg, program director of The Providence Plan, noted that, “we are all in this together.” In order to fix the health care system, she said, employers need to make changes.
She also provided an overview of the Health Insurance Small Employer Task Force as to the principles or “key drivers” that have been developed in response to proposed rates.
Factors involved educating employers that service volume drives revenue, lifestyle and behavior impacts rates, lack of provider coordination is an issue, as is lack of evidenced-based care, lack of provider coordination, lack of priced-based competition and so forth.
“These factors all work together,” she said. “We need quality care and we need a more rational system. So what can we do? Employers can go to the plan that requires primary care. Employers can encourage wellness [and] current care, which will allow one test to stand in for two tests.”
Also, Rosenberg and Boyle spoke of the importance of such forums.
“Being here and learning and raising your concerns with Commissioner Koller is a great thing,” Rosenberg said. “Letting insurers and providers know that employers are watching an engaged, that’s when change will happen. It happened in Massachusetts because Governor Patrick started to talk about things that needed to happen. Rates began to moderate.”
Boyle added, “We’d like to have more of these forums.”