Rising Insurance Premium Concerns for Small Businesses
The National Federation of Independent Business (NFIB) recently raised significant concerns over rising insurance premiums during a presentation to the Health Care Cost Transparency Board and submitted testimony to the U.S. Senate Committee on Finance. The discussions highlighted the impact of anticipated health insurance cost increases on small businesses, especially with premium hikes exceeding initial insurer requests. This issue underscores the pressing need for transparency and effective risk management in managing health care expenses.
Patrick Connor, NFIB Washington State Director, highlighted how state-level decisions influence insurance costs. He noted a nearly 10% average rate increase for small business plans, where the Office of the Insurance Commissioner (OIC) granted insurers requests averaging 30% above the original figures. Connor emphasized the importance of regulatory compliance requirements to maintain transparency and control over escalating costs effectively.
Industry Solutions and Recommendations
This week, NFIB participated actively in both federal and state discussions addressing affordability challenges in the health insurance market. In its testimony for the Senate hearing titled "The Rising Cost of Health Care: Considering Meaningful Solutions for all Americans," NFIB proposed solutions to tackle cost escalation driven by mandates, restrictions, and inadequate competition among carriers.
Tyler Dever, NFIB's Principal of Federal Government Relations, stressed the unsustainability of current health insurance cost trends. He urged Congress to address fundamental cost drivers rather than relying on financial interventions alone. The need for a comprehensive approach to payer and provider collaboration was also highlighted as central to ensuring competitive underwriting and claims processing.
Key Testimony and Future Steps
Connor's testimony included practical recommendations, such as examining the role of Pharmacy Benefit Managers, assessing not-for-profit insurers' surplus funds, and evaluating non-profit hospitals' community benefit programs. The testimony also raised concerns about the management of the 340B prescription drug program, prompting the state insurance commission's senior policy analyst and the CEO of the state's healthcare exchange to consider the NFIB's suggestions seriously.
NFIB's latest report highlights a decline in the small group insurance market, with participation dropping from nearly 15 million in 2014 to 8.5 million in 2023. It identifies the affordability of health insurance, driven by increasing premiums, as a looming challenge for small businesses. The NFIB continues to advocate for actionable measures to mitigate these challenges, as escalating insurance costs threaten the sustainability and market accessibility for small business owners nationwide.