Helping Small Business Owners Weather the Storm
Delivering predictable health insurance premium rates to small businesses is a top priority for Blue Cross Blue Shield of Michigan.
Small businesses in Michigan make a big impact: for every dollar spent at a small business, about 67 cents stays in the community. And Michigan’s small businesses employ half of the state’s workforce.
Yet their small budgets force owners to make difficult choices during economic storms: when costs pile up quickly, owners may have to choose between offering their workers health insurance benefits or hiring a needed employee. Many of Michigan’s small businesses don’t choose to offer health insurance: only 33% of small businesses did so in 2017.
By moderating premiums over time, Blue Cross helps the 873,700-plus small businesses across the state be confident that their budgets will be able to manage any season of change.
Blue Cross continuously monitors rate trends for its small business customers. In the first and second quarter of 2020, Blue Cross offered an average rate increase of 5.4% for PPO customers and 6.1% for HMO customers. Despite the increase, Blue Cross was able to hold the line on health care premiums for small businesses in 2019, with an average rate increase of 1.3% for PPO customers and an average rate decrease of 1.4% for HMO customers.
These small average increases, coupled with average rate reductions Blue Cross has provided the market in recent years, have kept overall costs for health insurance predictable for small employers. Since 2015, PPO members have seen an overall rate increase of just over one percent, while HMO members have experienced a decrease of just under one percent.
Health insurance costs and health care costs are linked. Blue Cross’ ability to stabilize pricing for small businesses is due in part to more than a decade of work with its physician and hospital partners to improve the delivery of health care. Through initiatives like Patient-Centered Medical Homes and Value Partnerships, preventative care is being emphasized at the doctor’s office to cut down on repetitive tests and readmissions to the hospital.
In addition, a growing number of Michigan physician organizations and health systems are signing on to Blueprint for Affordability, a new value-based reimbursement model that promises to further drive down inefficiencies in health care and improve outcomes for patients. Through a new investment in the nonprofit drug company Civica Rx, Blue Cross is also taking action to stabilize the cost of prescription drugs.
In addressing these root costs of health care services, Blue Cross can return the savings to its customers.
Over time Blue Cross has managed to make premium rates for small employers more predictable. Instead of cost spikes that cause small business owners to avoid offering health insurance to their employees, Blue Cross continues to offer small businesses high-quality insurance at rates they can plan for.
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