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Texas is a well-known destination for businesses and entrepreneurs looking for low taxes, economic freedom and a stable regulatory environment. Most of us would not have it any other way; after all, our reputation for being business-friendly has helped us become the ninth-largest economy in the world and contributed to GDP growth that consistently outpaces the national average.
However, when it comes to how our lawmakers craft health care policies, that pro-business talk is too often, as we say here, “all hat and no cattle.” In fact, rising health care prices — and the bad policies that have contributed to those prices — are the biggest threat to our sustained growth and prosperity and are quickly turning our “business-friendly” reputation into more of a myth than a reality.
Consider these alarming facts:
- In 2022, the average price of health insurance in Texas increased at a rate of nearly 13%, the fifth highest rate in the nation, according to data compiled from the Centers for Medicare and Medicaid Services. At this pace, the average price of health insurance will double in six years.
- At $15.3 billion per year, Texans already spend more than any other state on prescription drugs, according to the 2022 Prescription Drug Report from NiceRx.
- In the last 10 years, the Health Cost Institute reports that our Emergency Room prices have increased by 83%, making Texas ERs the most expensive in the nation.
Texas’ out-of-control health care prices are borne by families and businesses and are a crisis for both.
Individual patients are dealing with higher prices that sometimes venture into the obscene. It is not hard to find health care horror stories in Texas: See the family billed $54,000 for a COVID test or the $41,000 hip replacement surgery that costs less than half of that out of state. Obviously, this kind of price gouging can be economically ruinous for most families, but it also takes a real toll on their health. The AARP reports that 4 in 10 Texans report either skipping doses or discontinuing use of their prescribed medications, meaning there are millions of Texans with health complications that are largely going ignored and untreated.
Meanwhile, businesses are shouldering a heavy economic load that is keeping them from growing and thriving. More than 13.5 million Texans — about 4 in 10 working adults — get their health care benefits from their employer, and the cost of those benefits is rapidly becoming unsustainable. Since 1986, Texas businesses surveyed by the National Federation for Independent Businesses have consistently ranked health care prices as their biggest challenge, but that decades-long problem has now become a legitimate crisis. Almost 1 in 5 small businesses have now completely stopped providing health care benefits for their employees, and many more have had to scale back hiring or even eliminate jobs.
Sadly, this crisis is largely self-inflicted. While it is true that health care prices are a problem nationwide, Texas lawmakers have consistently pursued policies that benefit narrow special interests over the rest of their constituents, and the results have been predictable.
In Texas’ 87th Legislature, almost 100 bills were filed that increased the price of health care coverage to employers. The House Insurance Committee passed 30 of those bills and seven became law.
One of those laws forces health insurers to use higher-cost pharmacies, even if they can get better deals for their members elsewhere. In fact, lawmakers saved the state about $70 million over two years by exempting plans for state employees and teachers from this costly requirement.
That is why they exempted plans for state employees and teachers, knowing that the fiscal impact for teachers alone would be about $70 million over two years. Unfortunately, they showed no such concern for private sector businesses, which will now shoulder the burden of higher prescription drug prices.
In 2023, lawmakers are once again considering more costly government mandates to health care. HB 2021 and the identical SB 1137, for instance, undermine the tools used by employers to negotiate affordable prescription drugs and will drive up prices and likely lead some businesses to drop coverage altogether.
Texas has long been considered a great place to live, work and raise a family. That is still true in many ways but, when it comes to health care policy, it simply is not anymore. For too long, we have existed in a climate in which health care benefits are increasingly unaffordable. Meanwhile, our residents suffer from higher costs and worse health care outcomes. Lawmakers need to right this ship quickly before our businesses begin collapsing under the weight of bad public policy.
Mia McCord is the executive director of Texans for Affordable Health Care. She wrote this column for The Dallas Morning News.
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