As reports continue to rank Michigan as one of the least competitive markets in the nation, the statewide trade group representing HMOs wants to ensure that insurance carriers are able to pursue business when employers bid out employee health coverage.
The Michigan Association of Health Plans (MAHP) backs legislation in Lansing that would require insurance carriers to provide medical claims data to agents and brokers representing employers to use when bidding out employee coverage for clients.
While employers’ claims data are already available when agents shop around for client coverage, a proposed bill in the Senate would standardize how data get disseminated, said Jeff Romback, MAHP’s deputy director of policy and planning.
That can lead to employers getting more and better bids when they bid out their employee health coverage, resulting in lower costs, Romback said.
“Now you’ve got everybody singing from the same hymn book,” Romback said. “We can all compete and we can all be working from the same data set and deliver better care to employers in Michigan.”
The bill would cover more than 6,500 Michigan companies that employ 100 or more people and have fully insured health benefits. The bill would also block carriers from turning off that flow of data when an employer seeks competitive bids, he said.
Similar bills in other states, including Wisconsin and Texas, have led to increased competition, said Romback, who concedes the bill probably won’t move through the state Legislature in the present lame-duck legislative session.
Instead, the MAHP is laying the groundwork now for a major push in the new session that starts in January, he said. The bill ranks as the top legislative priority for the MAHP in 2021.
“This is a bill we’re dedicated to,” he said. “We’re going to be gung-ho in trying to get it done.”
More, better access
The Senate Insurance and Banking Committee held its first hearing earlier this month on Senate Bill 1126, sponsored by Sen. Dan Lauwers, R-Almont. Lauwers believes the bill would lead to more competition in Michigan and better pricing for health policies.
“My bill would allow Michigan health care insurers to have more access and better access to claims data, therefore ensuring the employers would receive more accurate and competitive bids when it comes time to be purchasing health care coverage for their employees,” Lauwers said at the Nov. 4 Senate committee hearing.
Lauwers said he’s been working with the MAHP and Blue Cross Blue Shield of Michigan — which holds a two-thirds market share in the state for health coverage — on suggested changes to the bill he introduced in September. Lauwers said he wants “to make sure that we’re accurate in achieving our goal of creating better transparency of information, but at the same time now creating a system that encourages cherry-picking of good (employer) groups.”
The bill has the support for the Michigan Association of Health Underwriters.
David Sokol, president of Wilshire Benefits Group in Troy, told lawmakers at this month’s committee hearing that “transparency in all of its forms is really important to us to seek good solutions for our clients.”
Is it needed?
However, some West Michigan insurance brokers question the need for the legislation. They say they can already get employers’ claims data from incumbent insurance carriers when bidding out a client’s employee health coverage.
Most of that data comes with renewal notices, said Shannon Enders, a partner at Lakeshore Employee Benefits in Norton Shores.
“Nobody has trouble getting any of this information,” Enders said.
Romback said the bill would standardize how 24 months of claims data get reported and the depth of the data so carriers “look at it and do a better job underwriting.” The bill “is about reducing the information curve,” he said.
“It’s just kind of putting all these things in order that is going to help plans,” Romback said. “We just want to make it easier.”
Among the concerns cited by Drew VanDyk, a partner at Olivier-VanDyk Insurance Agency Inc. in Wyoming, is bill language that prohibits agents or brokers from requesting claims data from an insurance carrier more than once in a calendar year.
“What if I want to pull claims data halfway through the year to see how they are running so we can make adjustments?” VanDyk wrote in an email, calling that provision “very restrictive and (it) doesn’t allow me to do my best and monitor claims for my clients.”
Blue Cross Blue Shield of Michigan views the legislation as “an attempt by competitors to change state law in order to access proprietary claims data because customers are choosing Blue Cross in the market-driven bid process,” said Kristen Kraft, Blue Cross Blue Shield of Michigan’s director of state relations.
“Under our current group contracts, Blue Cross already provides a significant amount of cost transparency directly to our customers, including data on medical, pharmacy, dental, vision and hearing cost claims,” Kraft said. “Our electronic data system provides up-to-date information directly to our members. We make this information available because our customers are interested in it. From an employer standpoint, groups are generally highly sophisticated health care benefit shoppers, and many use firms with access to data to help them to secure high quality health care at the lowest possible price.”
The MAHP pushes the legislation as an annual report from the American Medical Association on health plan market shares across the U.S. ranks Michigan the third least competitive state in the nation for health insurance.
Statewide, Blue Cross Blue Shield as of 2019 led every market in the state and held a 67 percent market share across all health plans, according to the recent AMA report that lists the top two health plans in each state. Grand Rapids-based Priority Health was second with a 10 percent market share statewide.
Among HMOs in Michigan, Blue Cross Blue Shield subsidiary Blue Care Network had 55 percent of the market statewide, versus Priority Health’s 23 percent.
Blue Care Network led 12 of the 14 Michigan HMO markets listed in the AMA report. The exceptions were in the Grand Rapids area, where Priority Health had a 65 percent market share to Blue Care Network’s 35 percent as of January 2019, and in the Lansing area. Physicians Health Plan, owned by Sparrow Health, held a 52 percent HMO market share to Blue Care Network’s 42 percent.