Michigan health insurers propose higher 2015 rates

Most people buying their own health insurance in Michigan could see near double-digit premium increases next year.
AP Wire
Jun 26, 2014

 

State insurance regulators said Wednesday that dominant insurers Blue Care Network and Blue Cross Blue Shield want to raise rates by an average of 9.3 percent or 9.7 percent in 2015. The rate hikes are subject to change pending state review by Aug. 8, after which the federal government in the fall likely will approve whatever Michigan regulators decide.

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Blue Care and Blue Cross sell policies to about three-quarters of nearly 246,000 Michigan affected residents who purchase their own insurance — either through a new website created under the federal health care law or off the "exchange."

Humana is the insurer with the third-most customers in Michigan's individual market and seeks an average 18 percent rate increase affecting 16,600 customers. Time Insurance and Total Health Care USA, the next-biggest players in the market with 14,000 and 13,500 affected customers, proposed 7.9 percent and 8.6 percent hikes on average.

Terry Burke, Blue Cross' vice president for individual business, said higher premiums are needed to account for rising medical costs and uncertainty over the influx of previously uninsured people covered through health overhaul.

"We've got a big influx of people and we don't know what their claims conditions are. The actuaries are concerned about that risk mix," he said.

Michigan's federally controlled insurance exchange is poised to grow, with more carriers — 18 — entering the market to compete for business, five more than last year. Sixteen submitted plans for the individual market and 11 offered plans for employers with up to 50 workers.

Some insurers with smaller numbers of enrollees in Michigan proposed average premium drops ranging from 2.7 percent to 21.6 percent.

The proposed premium hikes "are not final figures," said Caleb Buhs, spokesman for the state Department of Insurance and Financial Services. "We have to thoroughly review the rate plans and the rates themselves to ensure they're actuarially sound and there's adequate network coverage and take into account general public comments."

The companies' suggested rate increases 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 altogether.

The estimated 246,000 state residents affected by the proposed rate increases is different from the 272,000 people that President Barack Obama's administration said signed up in the first enrollment period under the health law. The state figures do not include people who Obama let keep their individual insurance policies even if they are not compliant with the law and there also may be discrepancies in how insurers count policyholders, Buhs said.

Another factor could be that people who signed up on the exchange did not actually pay their insurance premiums.

Tax credits make insurance more affordable for many of the residents who enroll in a plan through the federal marketplace. Those subsidies are tied to a benchmark policy known as the second-lowest-cost silver plan.

The tax credits for 2015 will not be known until closer to the second annual enrollment period that opens Nov. 15.

Comments

rj18rad

And this is a surprise?

truthhurts

Thanks Obama Biden Laden

skyking007

Oh yes Blame President Obama. Were not prices rising before the Affordable care act? That's just Phony Capitalism. Price fixing at it's worst.

Vladtheimp

I see - in your economic model, Obamacare requiring insurance policies to cover birth control and maternity coverage,for all men and for us Senior Citizens, mental health coverage, domestic violence coverage, not to mention coverage for abortions has no impact on the cost of insurance.

You are correct that it's Crony Capitalism - Obama promising to give insurers multiple millions of new customers with unnecessary coverage, both mandated by law, in return for their support of Obamacare. To sweeten the pot, Obamacare mandates taxpayers to subsidize any losses suffered by insurers because their new clients are sicker than the norm. That's the price fixing.

VanX

Equating President Obama with Osama Bin Laden is not clever. I heard a quote the other day, "if you hate someone, they control you". Reflect on that for a little while Einstein.

truthhurts

you mean someone that has caused more harm than good to this country? and feels the need to conduct gov. operation like a terrorist? at least this terrorist can only control for what another 2 years reflect on that little skater. trust and respect is earned.

VanX

You are obviously regurgitating talking points from Fox News and Rush Limbaugh. Keep on slapping lies, half truths and the tiresome BS and some of will stick. It apparently stuck to your feeble brain. The republican-controlled congress is responsible for a lack of President Obama's inability to get anything done. Borderline treasonous as far as I'm concerned. You don't speak for the majority of Americans and your Tea Party act is getting tiresome and problematic. Go back to your underground bunker and read the expiration date on your canned food and wait for the next government shutdown. And take your stupid lawnchairs out of your trees.

truthhurts

obviously you keep regurgitating the same thing as well. I don't read fox news...doc says the blood pressure needs to stay low

Hoofhearted

Six years into this presidency and someone help me understand what is better in this country. Is it the higher gas prices, higher health insurance premiums (I have more money than ever taken out of my check at work) higher food prices, or is it the lack of good jobs. Everyone I know is either out of work, working 2 crappy jobs just to still not get by or underemployed.

Tri-cities realist

Now you understand what is meant by "fundamentally transforming" our country.

Keeneye

The insurance companies are 20% of our economy, huge legacy cost from defined benefit pensions from previous decades, Own a few politicians, good friends with the ama and ada, and would like to maintain their current 70s 80s lifestyle even if yours is on the decline. Our health care cost are 75% higher than the next closest industrialized nation (Australia). And they add little but cost to the mix.

Keeneye

The insurance companies are 20% of our economy, huge legacy cost from defined benefit pensions from previous decades, Own a few politicians, good friends with the ama and ada, and would like to maintain their current 70s 80s lifestyle even if yours is on the decline. Our health care cost are 75% higher than the next closest industrialized nation (Australia). And they add little but cost to the mix.

Lanivan

US health care costs have exploded since 1940, making the US off the charts in health care expenditures compared with other industrialized nations (see kenneye). The share of GDP accounted for by health care spending rose from 4.5% in 1940 to 12.2% in 1990.

In 2005, health care spending was $2 Trillion - 16% of GDP, and is projected to reach $4 Trillion - 20% of GDP - by 2015.

Single payer would have been a means of addressing this out of control increase in spending. Obamacare, based on free market capitalism, relies on the laws of supply and demand and competition to influence the health insurance industry to determine their individual price structures.

This article indicates that insurance company competition is heating up in Michigan. It won't take long for market forces to determine rates.

Obamacare mandates essentially three things: Insurance companies can no longer deny coverage for pre-existing conditions or drop you based on your medical condition; they must use at least 80% of insurance premiums on customer health care instead of administrative costs (insurance industry CEO's have some of the highest salaries/perks in the US); there is now a minimum amount of care that must be offered in their least expensive policies - no more junk policies.

In exchange, they now have millions more customers. If they choose to respond by raising rates, so be it. Enough people flock to the better value insurance companies, they are bound to begin to "reassess" their premium structures.

Tri-cities realist

"Single payer would have been a means of addressing this out of control increase in spending."

When has a govt program ever accomplished its stated goal? AFDC, WIC, and other welfare? Nope still record poverty after over half a decade and spending trillions.

And somehow obamacare will be different?

Until one admits that govt is not the solution, they will continue to be part of the problem.

 

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