Taking AIM: Health insurance reform tops Missouri's agenda

At nearly the halfway point in the 2000 Missouri legislative session, both the House and Senate are attempting to formulate measures which will provide some relief to employers in their constant battle to control rising health care costs. This process is nothing new in Jefferson City. Major health insurance reform bills were proposed throughout the 1990s, though most were not successful.

Prior to the 2000 session, Associated Industries of Missouri conducted a survey of its membership to better understand the issues surrounding rising health care premiums and to formulate legislative solutions to these concerns.

In the survey, Missouri employers indicated their premiums were rising between 15 percent and 30 percent. Additionally, more employers than ever before were seriously considering reducing or eliminating benefits as a result of these skyrocketing costs.

In today's tight labor market, this is a difficult decision. As Springfield area employers know, a quality health care benefit package can mean the difference when seeking to attract and keep quality workers.

When asked about the origins of the rising costs, most employers pointed to the stream of health care mandates passed in Jefferson City. National studies indicate that the most common state-imposed mandated health benefits can raise the cost of health care as much as 20 percent.

In the 2000 session, the Missouri Legislature is considering approximately 30 bills that would force employers to offer various types of coverages.

State mandated benefits place state government in the role of designing benefit packages. This creates a one-size-fits-all mentality, removing the ability of businesses to base benefits on what employers can afford and what employees need.

In some cases, mandated benefits create access to treatments which are well intentioned. Cancer screenings and other preventive coverages attempt to head off life-threatening illnesses. However, a mandated benefit passed by the legislature in 2000 only pertains to approximately 38 percent of the state marketplace. The other 62 percent work for businesses that self-insure their benefit programs and do not have to comply with state mandates because of Employee Retirement Income Security Act laws.

As cost-driving mandates are passed, the number of businesses making the decision to self-fund increases, reducing the number of Missourians with access to each government mandate. This statistic seems to indicate that the free market not government intervention is the best way to encourage employers to voluntarily add coverages.

In the 2000 legislative session, Associated Industries is fighting to create a state-mandated-benefit review committee to evaluate proposed mandates for their potential cost impact on employers and utilization. Mandates that are simply cost drivers should be eliminated.

A second approach to scrutinizing state government mandates is the establishment of a "test-track" approach. This process would require mandates passed by the legislature to be included in the Missouri Consolidated Health Plan for state employees for two years before moving into the open market. This two-year trial period would provide information regarding cost impact and utilization patterns.

The Missouri legislature is also considering a program to help provide affordable insurance for businesses making first-time purchases of health insurance.

Current estimates suggest that there are 700,000 Missourians without health insurance. A large percentage of these individuals work for small businesses of fewer than 25 workers. Because of a lack of buying power, these small businesses often encounter "sticker shock" when they price health insurance. An incentive program would help many of these firms enter the marketplace, thus reducing the number of uninsured or underinsured people.

Associated Industries is advocating a grant program to provide financial assistance for these firms over a five-year period. As these companies enter the market, the cost of caring for the uninsured will be reduced for all businesses.

Keeping small employers in the marketplace is also a major challenge facing the legislature. AIM is leading the fight to provide similar financial assistance for small businesses receiving premium rate increases of 20 percent or more. This assistance would come in the form of a per employee per month credit.

Fighting state government mandates and creating incentives for employers to make a first-time purchase of health insurance would help improve our state health care system. In past years, legislative proposals have fallen victim to a desire to accomplish too much too soon. Incremental reform, which provides time to evaluate and study impact to the overall health care marketplace, is the best avenue to health care improvements.

(Chris Long is president of Associated Industries of Missouri, a business and industry trade association serving more than 1,500 Missouri employers.)