Employers, what value are you getting for the health insurance premium dollars you spend each month? Fortified by a new Texas law, the Texas Medical Association (TMA) is posing that question and offering a new tool to help small-business employers determine the answer. At stake for employers and their employees are lower health insurance costs and potentially more insured Texans.

"Unless they ask, they're not going to get the information," Austin obstetrician-gynecologist Albert T. Gros, MD, chair of TMA's Council on Legislation, told TMA's Texas Medicine magazine. "And for those who do ask, it's really an eye-opener."

The magazine cited small businesses who discovered too much of their premium dollars were paying for their health plans' administration and profits, and too little for actual health care. The new law gives employers the right to ask their health plans exactly how much of their premium dollar is spent on health care. Organized medicine is teaming up with small-business representatives to urge employers to ask questions. TMA has created a Web page and online worksheet for small businesses to find out how much of their premium dollar is actually going to health care.

If employers discover that too few of their premiums dollars are going toward health care, they might choose to shop for more affordable health insurance for their employees. Health insurers set premium rates for individuals and businesses. The fewer premium dollars insurers spend on health care, the more they can put toward profits. The health insurance industry says on average, 86 cents of every premium dollar pays for medical services, and the other 14 cents goes toward the insurer's administration and profits.

Yet Texas Medicine shares examples of small businesses spending more on insurers' profits than the insurance industry's own target ratio. The 21 employees of the Harris County Medical Society (HCMS) learned their insurer, Blue Cross and Blue Shield of Texas, spent only 67 percent of HCMS' premium dollars for care under the society's employee health insurance plan. Nonetheless, Blue Cross raised HCMS' premiums 22 percent, in 2006. The following year, Blue Cross spent even less of HCMS' premium dollars on health care - only 51 percent - but hiked their premiums another 12 percent anyway.

In an accompanying commentary published in the May Texas Medicine, Linda Siy, MD, of Fort Worth expressed her concern. "Something is seriously wrong with our health care system," said the TMA member and Texas Academy of Family Physicians president. "In a time of record health insurance profits and obscene executive compensation, how are these health insurance costs justified?"

TMA wants to know as well, and hopes helping businesses educate themselves about what they are paying will help. With the online worksheet, TMA is working with the Texas chapter of the National Federation of Independent Business (NFIB) to create more transparency in the health insurance industry.

"The No. 1 issue on the small business owner's mind in Texas is heath care and providing health care for their employees," said Texas NFIB Legislative Director Lance Lively. "That's what's truly scaring my folks to death. In addition, the gap seems to be widening with rising premiums. When premiums go up, all we're doing is driving more people into the uninsured world."

TMA is the largest state medical society in the nation, representing more than 43,000 physician and medical student members. It is located in Austin and has 120 component county medical societies around the state. TMA's key objective since 1853 is to improve the health of all Texans.

Texas Medical Association