Health-Care Mandates
Issue Overview: Affordable health insurance has been a top concern for NFIB members. Despite good intentions, many legislatures have passed additional health-care mandates in recent years. According to the nonprofit, nonpartisan National Center for Policy Analysis, studies have shown mandates can account for 7 percent to 21 percent of insurance claims. The insurance industry does not absorb these costs; it recoups them by increasing premiums on policy holders. Additionally, many large employers are self-insured and exempt from state health-care mandates, leaving small businesses and individuals to bear the brunt of the cost of additional mandates.
Issue Status: The Senate Banking and Insurance Committee approved S. 20, a bill to impose a health-care mandate on the individual and small employer health insurance markets for pervasive development disorders, on March 15, 2007. The bill was approved by the Senate by a voice vote on April 27, 2007. The House approved the bill, without amendments, on May 25, 2007. Gov. Mark Sanford vetoed the legislation on June 6, 2007, citing several concerns (read his veto message). The bill became law when the House and Senate overrode the governor's veto unanimously on June 7, 2007.
NFIB Position: NFIB opposed S. 20 as originally written because the legislation did not exempt the individual and small-employer markets. The additional cost of this new mandate to small businesses was estimated to be 5 percent of a policy holders' total premium. In 2005, the General Assembly wisely exempted small businesses from a mental health parity mandate, which would have increased premiums 10 percent to15 percent. NFIB strongly lobbied for a similar amendment to S. 20. NFIB's efforts were successful and the exemption amendment was included in the amended version of the bill as passed by the Senate. Senators did not amend the bill during the committee process or during floor debate, ensuring that the NFIB-backed exemption would remain intact.
NFIB members prefer market-based solutions, which include reducing the number of mandates. On a recent member ballot, 77 percent of NFIB members would support a law allowing small business to purchase a health-insurance policy without all state health-care mandates (often called a flexible benefit plan). NFIB will work with legislators to introduce this legislation during the 117th General Assembly.
NFIB Actions: NFIB/South Carolina State Director Jay W. Ragley testified before the Senate Banking and Insurance Committee on March 14 to express the important concerns of small business. NFIB subsequently mailed a letter to each senator informing them that S. 20 would be a "key vote" on the 2007-08 NFIB/South Carolina Voting Record. On April 26, the Senate amended the bill and included the NFIB amendment to exempt the individual and small employer markets from this new mandate. During the past two years, NFIB has successfully lobbied to exclude small businesses from two new and costly health-care mandates – mental health parity and pervasive development disorders. Because of NFIB's actions, small businesses saved significant money, stopping an estimated 20 percent cost increase, on their health insurance premiums.
