By: Alicia Pierce | Thursday, January 26, 2023

This week, Sen. Drew Springer filed SB 605 which would give Texas employers the flexibility to select the best value in health insurance for their employees. It is the companion bill to HB 1001 by Rep. Giovanni Caprilione. Both bills would allow health plans to offer coverage that meets all the protections of insurance but is exempt from mandates that go beyond federal requirements.

What they’re saying: “Texas ranks third for the state with the most health care mandates, and all these added costs make the rising cost of employer insurance unsustainable,” said Jamie Dudensing, CEO of the Texas Association of Health Plans. “These bills allow health plans to offer more affordable insurance that still covers all the essential health benefits without the added cost of extra regulation.”

What would the bills do?

• Allow health insurers to offer new plans that are not subject to any state requirements that go beyond what is required by federal law and the coverage state elected officials approve for themselves.
• Requires health plans to offer this mandate-lite coverage in addition to plans that meet all government imposed mandates—so employers and families always have a choice in selecting coverage

Overregulation and mandates hinder innovation and add costs to an already expensive system—forcing employers and families to bear the cost of one-size-fits-all coverage. Families and businesses have one big ask in health care—make it more affordable. With mandate-lite coverage, employers will have more flexibility to choose insurance plans that meet their needs. 

In 2021, Texas reached a high-water mark for the number of mandates placed on health insurance. Following the session, Texans saw a 13% increase in premiums, while around the nation, year-over-year premiums were flat. 

These bills are especially important for small businesses in Texas. Most large employer coverage is self-funded, which means it is not regulated by the state. 

We know this concept can work because Texas tried it before with impressive results. In  2003, Texas lawmakers recognized the same problem we have today and first established mandate-lite coverage. But over the years new regulations and requirements ate away at those efforts. From 2004-08, more than 8,000 employers used those early mandate-lite options to cover previously uninsured groups. In 2004, Scott & White had a 26.5 percent reduction in insurance premiums. HMOs indicated a  savings of up to  26.5%  and PPOs indicated a savings of up to 38%.

“Senator Springer and Chairman Capriglione deserve praise for the efforts to help employers provide reliable, affordable coverage that helps their employees stay healthy and thrive,” said Dudensing.