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Published in Health Care

New state law aims to boost competition for health insurance as large employers seek coverage for workers

BY Monday, June 27, 2022 12:45pm

Gov. Gretchen Whitmer has signed legislation that is designed to better enable large employers to bid out their employee health coverage.

The new law requires health insurers to provide details to large employers about their coverage’s medical and hospitalization claims, when requested. Sponsored by Sen. Dan Lauwers, R-Brockway Township, Senate Bill 447 passed both the House and Senate this month by wide margins.

The law was written so large employers could access the data needed to seek bids from other carriers when renewing their employee health policies.

The Michigan Association of Health Plans, which represents HMOs in the state, said the measure could help improve competition in Michigan for health benefits.

Michigan last year ranked as the second-least competitive market in the nation for health coverage in an annual American Medical Association (AMA) report on health plan market shares in 384 markets across the U.S. That was a decline of four positions from the prior year.

“Michigan Association of Health Plan members are declining to quote nearly half of the bid opportunities they receive because employers today do not have enough information about their prior claims and utilization,” said Dominick Pallone, executive director for the Michigan Association of Health Plans.

“When employers shop for health care insurance, they aren’t shopping effectively because they’re not armed with the data,” Pallone said in a statement. “If we can increase competition in this state, we can contain health care costs and improve quality of care.”

The AMA’s 2021 market share report issued last fall listed Blue Cross Blue Shield of Michigan as holding 68 percent of the Michigan market across all product categories in 2020. That’s up 1 percentage point from the 2020 AMA Competition in Health Insurance report.

Grand Rapids-based Priority Health ranked second statewide with a 10-percent market share across all types of health policies.

The new law enables large employers to access data on total inpatient and outpatient expenditures, the amount paid for prescription drugs, and the top 50 drugs for which claims were most frequently paid and where expenditures were the highest.

“Everyone knows insurance is a major cost in our lives. I’m glad the Legislature and the governor were able to support this change which can lead to greater transparency and lower insurance costs for the people of Michigan,” Lauwers said in a statement issued today by the governor’s office.

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