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Commentary: Protecting Employer-Sponsored Health Care Plans

Mar 29, 2023

Each year during Maryland’s legislative session health care costs, needs, and other issues dominate the headlines for good reason — affordable and accessible health care is essential to a thriving, healthy, and productive Maryland.

However, when lawmakers debate the complex issues surrounding prescription drug affordability and health care access, one key detail is typically overlooked: that a majority of Marylanders are covered by employer-sponsored health plans, which employers and employees depend upon to provide affordable access to health care and prescription drug benefits.

This legislative session, employer-sponsored health insurance is under attack — and Maryland workers and employers stand to incur significant increases in co-pays, co-insurance rates, and prescription drug prices. Meanwhile, some manufacturers and certain retail entities stand to gain via increased profits made on the backs of Maryland families and employers.

For more than 50 years, self-insured employer-sponsored health care (a popular health care structure for Maryland employers, local governments, schools, and unions) has been governed by the Employee Retirement Income Security Act of 1974 (ERISA).

This federal preemption provided uniform regulations and protections for employees and employers sponsoring their health care. This uniform set of standards allowed Maryland businesses, local governments, unions, and schools to provide affordable and accessible health care and prescription drugs to their employees.

But after years of lobbying and legal tactics from special interest groups, parts of ERISA were struck down in federal courts in 2021, allowing those special interests to attack ERISA protections at the state level.

Now in 2023, Maryland lawmakers are becoming complicit in those attacks on ERISA protections by introducing HB 357/SB 898 in the General Assembly. This bill strips away the very ERISA protections and benefits that have allowed employers to provide health care and prescription drug benefits at affordable prices for thousands of hard-working Marylanders.

Some of the protections and benefits that will be gutted by HB 357/SB 898 include eliminating discounts for co-pays, which employers use to drive down costs by encouraging patients to visit pharmacies or utilize mail-order prescription services that sell drugs at lower prices. This legislation also allows for price gouging by eliminating the protections that control costs for specialty prescription drugs or when purchasing prescription drugs from a specialty pharmacy.

The bottom line is if this legislation passes, Maryland lawmakers will increase costs throughout the health care supply chain, and there’s no question who will bear the brunt of the increased co-pays, co-insurance rates and higher drug prices. Those costs will flow downhill to employees who want and need these benefits and the employers who strive to offer them.

In states where these attacks have been successful, the cost of prescription drugs is expected to increase by billions of dollars over the next decade. Employers and their employees will be on the hook.

With persistent inflation remaining a concern for working families and the prospect of a national recession looming, the last thing we need to do is increase the cost of health care and prescription drug benefits for Maryland businesses, workers and their families.

This legislation also targets employees beyond just the private sector. The proposed changes will also hurt our public servants who dedicate their careers to making Maryland a better and safer place to live. The vast majority of our state and local government public workers, teachers, school staff, and union workers are covered under self-insured plans.

HB 357/SB 898 is aimed right at the pocketbook of our police, firefighters, school counselors and their families who rely on affordable and accessible health care and prescription drug benefits provided by self-funded plans.

Given the far-reaching and negative impacts of HB 357/SB 898, we urge the General Assembly to vote no on this bill that does little to protect ratepayers and patients but instead increases costs that could run into the billions of dollars over the next decade.

As we move forward, let’s make sure we focus on policy changes that help Maryland employers provide affordable and accessible health care to their employees and their families. HB 357/SB 898 certainly doesn’t accomplish that.

Mary D. Kane is a proven leader in state, federal and global organizations and joined the Maryland Chamber of Commerce as President & CEO in October 2021.

In her role, she focuses on continuing to move the Chamber forward as the leading voice for businesses in Maryland. Kane has an extensive background in leading state, federal and global organizations, most recently at the U.S. State Department as Director of the National Museum of American Diplomacy.  

This op-ed was originally published by The Daily Record on March 28, 2023.