Many small businesses cannot afford to offer health insurance to employees, which is creating coverage gaps for working-class Michiganders.
Stakeholders discussed healthcare coverage barriers and possible solutions at the 2024 Michigan State of Reform Health Policy Conference last week. Michelle Beebe, chief revenue officer at the Small Business Association of Michigan (SBAM), said health insurance is the second-highest expense for a business owner, next to payroll.
“A lot of them are eating double-digit increases, which translates to increases to their prices,” Beebe said. “About 17 percent of our business owners have now chosen to not offer coverage because of the expense. They’re giving additional wage increases so people can go on the marketplace. But when you do that, they’re priced out of subsidies. So there’s this conundrum of eligibility. And there’s people that fall into that gap.”
Beebe also discussed an underserved group of business owners who don’t qualify for health coverage through the Affordable Care Act.
“Out of our 33,000 members, we’ve got approximately 10 percent of them that fall into that bucket that don’t have access to care,” Beebe said. “When you’re talking about an employer that has 50 or fewer employees, this is their conundrum. And this is the reality.”
Rep. Brenda Carter (D-Pontiac), chair of the House Insurance and Financial Services Committee, said the average employer-sponsored family health insurance plan’s cost increased by seven percent in 2023. Carter will be hosting a Small Business Town Hall on Saturday at the Bowens Senior Citizen Center in Pontiac, where small business owners can discuss health insurance concerns.
The SBAM will join several other agencies at the town hall—including the U.S. Small Business Administration, the Michigan Economic Development Corporation, Oakland County, and the Pontiac Chamber of Commerce—to discuss community and statewide resources available to small businesses.
“It’s amazing how this concept grew on all levels. The small businesses in my district are suffering—a lot of them didn’t survive the pandemic—so we’re bringing the resources to them. All levels of government are going to be able to hear what small businesses are actually going through, and (can) maybe offer some resources to them for how to sustain their businesses.”
— Carter
Carter said high drug costs are creating barriers to care as well. She noted that the average cost increase for prescription drugs in 2023 was about 8.4 percent, compared to a 6.4 percent increase in 2022.
“If you keep that projection going, it’s going to skyrocket,” Carter said. “This is something we can really do something about. We need to have some kind of caps on prescription drugs. We need to have transparency with prescription drugs. We have legislation out right now that’s addressing this, and will hopefully be implemented into law.”
Senate Bills 483, 484, and 485 would create a Prescription Drug Affordability Board (PDAB) in Michigan. The bills passed in the Senate last fall and await votes in the House.
“The insurance industry is heavily regulated. But on the manufacturer’s side, they’re not. So if we start regulating some of this, maybe we can lower those costs. I think a PDAB is a step in the right direction. And it’s landed in my committee, so we’re going to have to do our homework on this one. There’s a lot of bills going through right now that are going to make healthcare accessible for all. And that’s the goal of what we’re trying to do; make sure every single Michigander has quality, affordable healthcare.”
— Carter
The Medicaid redetermination process is also impacting coverage in Michigan, as health officials continue to redetermine residents’ Medicaid eligibility following the end of the public health emergency. Karin Gyger, chief deputy director of the Michigan Department of Insurance and Financial Services, noted that 1.4 million Michiganders have renewed their Medicaid coverage so far.
“We found this was an opportunity to connect with Michiganders about health coverage, and have those conversations,” Gyger said. “It was an all-hands-on-deck effort. Everyone across the state’s government was committed to using our resources to connect with Michiganders. And we’re just now starting to get that data to see where everything has landed.
From the insurance side, we had a record-breaking year for marketplace enrollment. Nationwide, 21 million Americans now get their coverage on the marketplace. In Michigan, it’s 418,000. That’s a 30 percent increase from the previous year. We never thought we’d hit 400,000 so that’s extraordinary.”