Pooling will help save on health costs is NOT proven to work!

This is in response to Sen. Wayne Kuipers and Sen. Patty Birkholz's letter to the editor on May 22, 2007.

Pooling is not the answer.

Sen. Kuipers and Birkholz say pooling is the answer to the State of
Michigan’s public employee insurance costs (HS 5/22/07) and tell us to
support the Michigan Public Employee Health Benefit Act (SB 418).

The bill cited by the senators is just a slightly tweaked version
of Senate bills 895-898 that was defeated last year by a bipartisan
vote.

The truth on the new bill is that there is no proof that it will save
employees money while having the same benefits. No actuarial study of
the legislative proposals to substantiate the claims savings has been
conducted.

The bill proposed is actually anti-pooling because of the requirement
that all pools release group-specific medical claims data upon
request. This is creating the tool by which insurers could tear pools
down. There will be constant churning and adverse selection in the
market as groups come and go from pools as they please. For-profit
insurers will use the data to undercut the pools by agreeing to insure
only the best risk. Pools will be left with the high risk, most
expensive employees. As a result, premiums for many public employers
could actually be higher than they are today.

I am also concerned about a major loophole in SB 418. In addition to
allowing public employers to join together to form these new "public
employer pools," SB 418 also contains language in Section 11(d) that
would allow employers to pool together under any "written agreement."
There would be no regulations, state oversight, reserve
requirements or consumer protections required to pool under this
subsection. This is a huge loophole that would allow pools to be
created outside of the state’s existing consumer protections. It would
leave many public employees dangerously unprotected and exposed to
huge liability from unpaid medical bills.

It’s time to set politics aside and address the real health care and
benefit problems Michigan faces – the growing number of uninsured,
cost-shifting from under-funded government programs, quality, family
bankruptcies from medical bills, the long term costs of unhealthy
lifestyles, government mandates, fraud and the ever-increasing cost of
prescription drugs. The Senators have failed to address the real
issues behind the costs. Their bill will only add to the misery and
should be defeated.

AL Friend