Health premiums in Michigan's individual market may rise 28 percent
LANSING — Hundreds of thousands of people who buy their own health insurance on Michigan's individual market could see premiums rise by 28 percent on average next year if President Donald Trump follows through on a threat to cut billions of dollars in payments to insurers, state officials said.
Average premiums would range from 16.5 percent to 59.4 percent, depending on the company. The two insurers covering six in 10 of the nearly 300,000 residents who shop for their own coverage, Blue Care Network and Blue Cross, would boost premiums on average by 22.6 percent and 31.7 percent, respectively.
State Department of Insurance and Financial Services Director Patrick McPharlin said the size of the proposed increases is partially due to uncertainty over whether the federal government will continue to reimburse insurance companies for providing required financial assistance to lower- and modest-income customers. It was not immediately clear what the rate hikes would be if the cost-sharing payments continue for deductibles and co-pays, but an industry group projected they would average about 15 percent.
About 80 percent of Michigan customers on the federally controlled marketplace qualify for tax credits to offset their premium costs, making it difficult to say what they would actually pay each month out of pocket in 2018.
The state is seeking public comment on the proposed rates until Sept. 15, though historically state and federal officials have not altered the requests. Premiums rose by an average of nearly 17 percent this year.
The companies' average rate hike are composites — some customers renewing their coverage will see bigger premium increases and others lower ones depending on where they live, if they smoke and other factors. They also may choose to move to a different plan. Residents of every county will have at least two plans from which to choose.
Open enrollment begins Nov. 1 and continues through Dec. 15. Nine insurers — one fewer than this year and five fewer than in 2016 — plan to participate in the Michigan Health Insurance Marketplace next year. Another will sell individual insurance outside the government exchange.
For months, Trump — a critic of the federal health care law — has been threatening to stop payments that reimburse insurers for reducing co-pays and deductibles for lower-income people. The cost-sharing subsidies are under a legal cloud because of a dispute over whether the Affordable Care Act properly approved the payments. Other parts of the health law, however, clearly direct the government to reimburse insurers.
"If we receive a commitment that the CSR payments will be made, we are hopeful insurers will be allowed to change to a lower set of rates," McPharlin said in a statement.
Of the 115 plans to be offered on the federal marketplace, 93 would have rate increases of at least 10 percent.
“The lack of strong, continued commitment to these CSRs has created uncertainty for consumers and industries across the nation,” said Dominick Pallone, executive director of the Michigan Association of Health Plans.
The nonpartisan Congressional Budget Office said last month that if Trump makes good on his threat to stop the “Obamacare” payments, federal deficits would grow because a “difference ACA subsidy” would automatically increase as premiums jump. Consumers who now qualify for tax credits to offset their monthly premiums would be largely shielded from the estimated 20 percent spike in the cost of a standard “silver” plan, because of the increase in the premium credit.