New report provides pathway to lower costs for consumers and small businesses
March 3, 2023
FOR IMMEDIATE RELEASE
Chicago—A recent report from the Shriver Center on Poverty Law and Families USA found that a strong process for approving health insurance price increases leads to significant savings for consumers and small businesses. Transparent rate review processes, combined with consumer protection authority, are saving Rhode Island residents nearly $23 million and New York small businesses $632 million this year.
During the rate review process, a state’s insurance regulators must review proposed increases for health plans. Unlike about three dozen other states, Illinois regulators do not have the legal authority to reject excessive increases outright. Health care premiums are skyrocketing, especially for those who don’t get financial assistance in the HealthCare.gov marketplace.
“No one should have to choose between putting food on the table and getting the health care they need,” said Audra Wilson, president and CEO of the Shriver Center on Poverty Law. “Yet for too many people in Illinois, medical costs are too high, deepening inequities that affect Black and brown communities the most.”
The report makes key recommendations to make health insurance more affordable in Illinois, including:
These critical steps are included in the Illinois Health Care Consumer and Small Business Affordability and Transparency Act. This bill, sponsored by Sen. Laura Fine, will bring fairness to Illinois’ insurance market for consumers and small businesses by requiring the state to review and approve rates, as well as ensuring the process is transparent and inclusive.
Inequitable access to health coverage is a racial and economic justice issue. In 2021, 7% of Illinois residents lacked health insurance, according to U.S. census data released last fall. About 7.9% of Black people and 15.8% of Hispanic or Latino people in Illinois didn’t have insurance in 2021, compared with only 4.3% of white people.
“In order to shield families from the ever-growing crisis of out-of-control health care costs, state regulators should have the authority to reject unreasonable or unaffordable rate increases, and consumers and small business owners should be able to monitor rate increase requests,” said Frederick Isasi, executive director of Families USA. “We implore government leaders to protect people from these unfair price increases that are wreaking havoc on their health and financial security.”
Health care costs present challenges to small business owners. If they don’t offer health insurance, small businesses are unable to hire or retain quality staff. But high prices can force them to make critical budget decisions like cutting salaries to afford coverage.
According to a March 2021 survey by Small Business Majority, more than 1 in 3 small businesses reported challenges in obtaining health insurance coverage for themselves and their employees during the COVID-19 pandemic. Black, Latino and Asian American Pacific Islander small business owners are more likely to list this as an issue than white small business owners.
“Access to affordable health care is one of the top concerns for small businesses and the self-employed,” said Tasha Brown, Midwest director for Small Business Majority. “Small businesses continue to grapple with rising health insurance costs negatively impacting their bottom lines. And unlike large corporations, they don’t have the resources to negotiate rates with insurance carriers, placing them at a competitive disadvantage. The recommendations in this report will help address the needs of small business owners looking for affordable healthcare insurance plan options.”
About the Shriver Center on Poverty Law
The Shriver Center on Poverty Law fights for economic and racial justice. Over our 50-year history, we have secured hundreds of victories with and for people living in poverty in Illinois and across the country. Today, we litigate, shape policy, and train and convene multi-state networks of lawyers, community leaders, and activists nationwide. Together, we are building a future where all people have equal dignity, respect and power under the law. Join the fight at povertylaw.org.
About Families USA
Families USA, a leading national voice for health care consumers, is dedicated to the achievement of high-quality, affordable health care and improved health for all.
Healthcare is a human right. The high cost of care means millions of families have no access to the critical care all human beings deserve.
We are intentional about addressing barriers to healthcare that specific communities experience.