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"IT'S TIME TO SEEK PRICING TRANSPARENCY & FAIRNESS FOR SMALL EMPLOYERS" by Jon B. Hurst

Perhaps the best and most important entry in recent months to the Commonhealth blog was submitted by Nancy Turnbull on July 9, titled "How About Some Transparency for Health Plans Too." If you missed that entry, I strongly recommend that you go back and read Nancy’s common sense discussion. She correctly points out how the health insurers were big winners with health care reform, and while they talk a good game on transparency for providers, they conveniently leave themselves out of the proposals.

Small businesses couldn’t agree more. We firmly believe that “payers” of health care dollars (consumers, employers, taxpayers) deserve full transparency from all “receivers” of health care dollars (insurers, hospitals, doctors, etc.). Insurers should be mandated to make fully public the average premium cost of typical coverage for all types and sizes of purchasers.

For instance, small group employers with 5 covered lives, should know how much that same plan costs on an average basis with employers of 50, 500, or 5000. After all, if Blue Cross/Blue Shield of Massachusetts reimburses Partners the same amount for a surgical procedure no matter if I work for a firm of 5 or 15,000, how can they justify having family premium rates that are thousands of dollars higher for the little guy? Nancy furthermore suggested that insurers should make public the profitability of their small group business versus large group business and self-insurance business. In this new age of required insurance coverage, that is a tremendous idea that can help force fairness in the marketplace.

For health care reform to work in the long term, costs for everyone must be controlled. But equally important is that rates for small purchasers must drop and become comparable with those of big business and big government. A good first step in moving to rate fairness is insurer transparency. The Health Care Quality and Cost Council must be given this charge immediately. Then we need a full discussion whether more competition or more rate regulation is needed to ensure premium pricing fairness.

In this new day of mandated insurance coverage, it is no longer economically or politically feasible for small purchasers to subsidize the costs of big purchasers and the profits of insurers through higher premiums.

Jon Hurst
Retailers Association of Massachusetts

This program aired on August 16, 2007. The audio for this program is not available.

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