Rising costs and burdensome mandates limit the ability of small businesses to provide health care for their employees. NFIB submitted a statement for the record to Congress, urging action to end spread pricing from Pharmacy Benefit Managers (PBMs) and onerous Medical Loss Ratio (MLR) regulations that have only contributed to increasing health care costs.

Less than one third of small businesses currently provide health plans for employees, compared to 96% of large employers. These larger competitors have more options and greater negotiating power in offering health benefits for their employees. This puts small businesses at a competitive disadvantage to larger businesses and harms the workforce. Unless Congress addresses the root causes of out-of-control health costs, small businesses will continue to be in an impossible position — operate their business or provide health care for employees.

PBMs profit when drug costs are higher, creating an incentive to keep costs high. While PBMs charge health plans or employers one price, they reimburse dispensing pharmacies at a lower cost and retain the difference, spreading the profits and exacerbating costs for consumers.

The Affordable Care Act created burdensome regulations like the Medical Loss Ratio (MLR), which has fueled industry consolidation and contributed to the rise of PBM’s. Reforming the PBM industry and mandates like the MLR will not only stop third-party middlemen from adding to the exploding health care costs small businesses experience, but it will facilitate access to more transparent, affordable and flexible health care for the businesses.

Read the full statement sent to the U.S. House Committee on Education and Workforce for more information on how Congress can reform the broken health care system.

Take Action: Share with lawmakers how soaring health care costs affect your business.