With the Supreme Court set to make a ruling that could affect federal subsidies for insurance policies sold through HealthCare.gov, 17 out of the 21 Michigan health insurers selling coverage through the exchange are asking for rate hike approvals.
It appears that insurance companies are looking to build a cushion into their margins, in case people can’t afford their plans without subsidies and quit them altogether.
“Folks don’t know how [Supreme Court case] King v. Burwell will end up,” Rick Murdock, executive director of the Michigan Association of Health Plans, told the Detroit News. “It’s a big deal for a place like Michigan, where [more than] 80% of folks served on the exchange have some kind of subsidy.”
More than 340,000 Michigan residents purchased insurance through the exchange last year, and therefore could be seeing higher rates in the year to come. According to recently released federal data, about 86% of Michigan residents were able to pay their first month’s premium and retain coverage this year.
How significant are the requested rate increases?
Over half the companies are seeking more than a 5% hike, with five requesting double-digit increases.
Blue Cross Blue Shield of Michigan is seeking an 11.3% increase; Blue Cross Blue Shield policies make up about 70% of those sold to state residents on the exchange. Time Insurance Co. is asking for the biggest jump, 37%, apparently because it is creating completely new plans for next year.
The increases must be approved by the state insurance agency if they are to go into effect.
Many insurers across the nation are seeking rate increases, often justifying them based on the additional requirements the Affordable Care Act has implemented. For example, things like preventive care, maternity coverage, and obesity screening and prevention are all now mandated (perhaps a good thing, since the latest figures show more than 80% of adults don’t meet recommended guidelines for aerobic and strength-based activities).
However, insurance companies are saying, those additional costs need to be covered somehow.
The public is invited to comment on the proposed increases through July 1, according to the Department of Insurance and Financial Services.
