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Meghan Hess,
PIRGIM Education Fund

Health Care Repeal Would Have Costly Consequences for Michigan Consumers and Small Businesses

For Immediate Release

Ann Arbor, MI – Consumers and small businesses in Michigan will face significantly higher insurance premiums and could see costly coverage denials and price discrimination if efforts to repeal the federal health care law prevail in Congress or in the courts, according to The Cost of Repeal: Examining the Impact on Michigan of Repealing the New Federal Health Care Law, a new report released today by PIRGIM Education Fund.  

According to the report, in the short term, repeal would strip tax credits from 126,300 Michigan small businesses. And over the longer term, the cost of offering employer-based health insurance could jump by more than $3000 a year over current law.

Ann Arbor small business owner Mark Hodesh, who runs Downtown Home and Garden, says that a repeal of the tax credits would hurt his business—and the economy. “Knowing that we were going to get a tax credit for the portion of health care that we pay gave me the confidence to hire a new employee,” he said. “This person had been drawing unemployment, and now pays taxes. Our tax credit is contributing back to the economy.”

 “In today’s economy, the higher costs that would result from repeal are the last thing that Michigan consumers and businesses need,” said Meghan Hess, PIRGIM Program Associate.

The new PIRGIM Education Fund report draws on data from independent sources, including the nonpartisan Congressional Budget Office, other government agencies, business groups and health analysts, and finds the following:  

• Repealing the new state health insurance exchange would drive premiums on the individual market up to 20% higher for the same coverage by 2016.

• Without the new law’s insurance reforms, the 24.7% of Michigan residents who have pre-existing conditions, ranging from asthma to cancer, will continue to face coverage denials and price discrimination when purchasing their own insurance.

• If the insurance reforms are repealed, Michigan women will continue to pay higher prices than men for health coverage.

• Rolling back last year’s law would drive up employer health costs, leading to 6135 fewer jobs created per year in Michigan by the end of the decade.

• Outright repeal would pull $14.3 billion in federal Medicaid dollars out of the state's economy and terminate establishment or expansion of 184 community health centers across Michigan.

The U.S. House of Representatives is expected to consider a repeal bill later this month.  Michigan Attorney General Bill Schuette has signed onto a federal lawsuit urging the roll back of the law, and Washington's intensely partisan debate over health care will continue to spill over to Lansing as the governor and state legislators consider key implementation decisions.  

The Cost of Repeal recommends a set of pro-active policy changes on which supporters and opponents of last year’s health care law should be able to find common ground.  These include:

1. Using the substantial authority the state has under current law to design a health insurance exchange that is adapted to meet the needs of our state’s markets, consumers, and businesses.

2. Taking additional steps to contain health care costs, like using information technology to ensure that doctors receive the latest research about which treatments are most effective – at the patient’s bedside.   

3. Crack down on balance-billing, a practice whereby hospitals or providers accept payment from a patient’s insurance plan, then charge additional amounts-above and beyond the usual co-pays and cost sharing. 

“This PIRGIM report is a wonderfully concise validation for keeping the implementation of our new Affordable Care Act moving forward,” said Marjorie Mitchell, Executive Director of Michigan Universal Health Care Access Network. “The people of Michigan have suffered long enough with a health care system that routinely denies them insurance coverage or makes its purchase unaffordable. It would be cruel and immoral to repeal this law and to take away its opportunities and protections from Michigan consumers.”

"Before our elected officials join this headlong rush to repeal in Washington, they should consider the consequences for our state, and look for solutions that hold down costs, not increase them," said Hess.

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PIRGIM Education Fund, the Public Interest Research Group in Michigan, is a non-profit, non-partisan public interest advocacy organization. For more information, visit www.pirgim.org

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