Open enrollment for 2017 coverage is underway. Enrollments must be completed by December 15 for coverage to be effective January 1, although open enrollment continues until the end of January. If you have questions about how a Trump Administration is likely to impact the ACA and your coverage through the exchange, we have some answers here. For the time being, nothing has changed, and open enrollment is your chance to get coverage in place for 2017.
Michigan has a state-federal partnership exchange; the state oversees plan management, but Healthcare.gov is used for enrollment. Michigan expanded Medicaid under the ACA, and the exchange can enroll people in Medicaid or qualified health plans (QHPs), depending on their income.
HHS estimates that there are about 65,000 people in Michigan who have off-exchange coverage, but who would be eligible for subsidies if they switched to the exchange. If you’ve currently got off-exchange coverage, double check your subsidy eligibility in the exchange during open enrollment, as this is your opportunity to make your coverage more affordable for 2017.
Fewer carriers in 2017, but still a robust exchange
The Michigan exchange had 14 carriers offering coverage in 2016, and that’s declined to ten for 2017 (although some of the decrease is due to PPO entities leaving the exchange, while their HMO sister companies remain in the exchange). But ten carriers is still far more robust than most states, and Michigan residents still have a significant amount of choice in their health care coverage for 2017. And although rates are increasing, the increase isn’t as sharp as the national average.
Here are the changes you’ll see for 2017:
UnitedHealthcare is exiting the individual market in Michigan at the end of 2016, as will be the case in most of the states where they currently offer plans in the exchange. Their plans are not for sale on or off-exchange.
Priority Health Insurance Company, which offers PPO and POS plans, will only be offering small group plans, and only outside the exchange. But Priority Health, which is a separate entity, will continue to offer individual and small group plans, on and off the exchange, and is offering both HMO and POS plans for 2017.
Health Alliance is also dropping their PPOs, but will continue to offer more than 45 Personal Alliance HMO plans, both on and off-exchange. Blue Cross Blue Shield of Michigan is the only carrier that’s still offering PPO plans in 2017 through the Michigan exchange.
Harbor Health Plan is exiting the exchange at the end of 2016. They will continue to offer one bronze plan off-exchange in 2017.
Humana is dropping their individual PPO plans in Michigan at the end of 2016, but that only impacts the off-exhange market, as Humana’s on-exchange plans are HMOs.
2017 rate increases
The following average rate increases were approved for the carriers that are offering individual coverage through the Michigan exchange for 2017:
- Blue Care Network: 14.8 percent
- Blue Cross Blue Shield of Michigan: 18.7 percent (BCBSMI is the only carrier offering PPO plans in the exchange for 2017)
- Health Alliance Plan: 16.8 percent
- Humana: 39.2 percent
- McLaren Health Plan: 12.2 percent
- Meridian: 9.3 percent
- Molina: 3.2 percent
- Physicians Health Plan: 6.7 percent
- Priority Health (HMO and POS): 13.9 percent
- Total Health Care USA: 7.2 percent requested increase
For all of the on-exchange carriers, rates were approved as-requested. The rate review process resulted in some slight changes to the proposed rate changes for off-exchange carriers.
Although the overall average rate increase in Michigan’s individual market is 16.7 percent for 2017 (including carriers that only offer off-exchange plans), the average benchmark plan premium (second-lowest-cost silver plan) is just 7 percent higher for 2017 than it was for 2016 in Michigan.
The state is one of only nine that have single-digit increases in their average benchmark plan premiums for 2017. Subsidies are based on the cost of the benchmark plan, so they will rise modestly in 2017 in Michigan. Given the robust market and depth of plan choice, and given the fact that some plans have rate increases that are quite a bit larger than the average benchmark increase, it’s essential for Michigan residents to shop around during open enrollment, and switch plans if necessary to get the best value in 2017.
345,813 people enrolled in private plans through the Michigan exchange during the 2016 open enrollment period, including new and renewing enrollees. Total enrollment at the end of the 2015 open enrollment period stood at 341,183, so 2016’s enrollment was an increase of about 4,600 people.
But the actual increase was more significant than that, because 2016 is the first year that Healthcare.gov began accounting for attrition in real-time, while open enrollment was ongoing; the enrollment total already reflected policy cancellations (including unpaid premiums) as of February 1.
Open enrollment ended January 31. For the rest of the year, 2016 coverage (including outside the exchange) is only available for purchase if you experience a qualifying event. Examples of qualifying events include getting married or divorced, having a baby, or adopting a child, and Healthcare.gov began requiring proof of qualifying events in 2016. However, Native Americans can enroll year-round, as can anyone eligible for Medicaid or CHIP.
Consumers Mutual CO-OP closed
Consumers Mutual Insurance of Michigan was an ACA-created CO-OP that insured 28,000 members in 2015. They announced on November 2 – the day after the start of open enrollment for 2016 plans – that they would not sell policies on Michigan’s exchange (Healthcare.gov) in 2016, and that their existing on-exchange members would need to switch to a different carrier for 2016.
According to Crain’s Detroit Business, only a little more than a fifth of Consumers Mutual’s members purchased their plans in the exchange in 2015, and at that point, there was a possibility that the remaining 80 percent of the enrollees might be able to keep their plans, with the CO-OP continuing to offer plans outside the exchange.
But that hope was short-lived. By November 4, the announcement on Consumers Mutual’s website indicated that all enrollees – including those who had purchased their plans outside the exchange – would need to seek new coverage for 2016, and that the CO-OP would wind down its operations by the end of 2015.
On November 4, I talked with Michigan’s Department of Insurance and Financial Services (DIFS) about Consumers Mutual, and they confirmed that the initial decision to exit the exchange came from the CO-OP, not from state regulators. For most of the CO-OPs that have folded completely over the past year (the majority in late 2015), state Insurance Commissioners essentially ordered them to wind down operations amid dwindling reserves and potential insolvency.
But CEO Dennis Litos had confirmed that the CO-OP was reviewing its financial situation in conjunction with DIFS, and that one of the possibilities that was being considered was fully closing the CO-OP. Ultimately, that’s what DIFS and Consumers Mutual determined would be the most prudent course of action.
Consumers Mutual enrolled just 29 percent of their projected membership in 2014, and had net losses of $16 million during the first year of operations. They were the 12th CO-OP (out of 23) to fail, and are among the majority whose closing was attributed to the fact that the federal government only paid out 12.6 percent of the risk corridor payments that were owed to carriers based on losses in 2014.
6.5% premium increase for 2016
In August 2015, the Michigan Department of Insurance and Financial Services (DIFS) announced that the weighted average rate increase in the individual market for 2016 would be 6.5 percent, although the average rates increase dropped lower than that once Consumers Mutual exited the market. The CO-OP had by far the highest average rate increase for 2016 of any of the exchange carriers in Michigan, at 20.5 percent (the next highest was UnitedHealthcare, at 14.7 percent), but the new rates never took effect since members had to switch to a different carrier for 2016.
When we consider only the benchmark (second-lowest-cost Silver) plans across the state, the average increase in premiums in Michigan was 1.2 percent. That’s far lower than the 7.5 percent national average increase in benchmark plan premiums, although the change in benchmark premiums is not a particularly useful number for consumers, since the benchmark plan isn’t necessarily the same plan from one year to the next.
In 2015, average premiums in Michigan’s exchange decreased by 1 percent. Relative to that, the 2016 rate changes were much higher, but they were still about half as much as the average rate increases nationwide for 2016 (for 2017, the average proposed rate increase is roughly 17 percent). You can see 2016 exchange premiums by insurance carrier, metal level, age, and smoking status in a document prepared by DIFS.
In Michigan’s small group market, average premiums increased by just one percent for 2016.
In August 2015, DIFS released a user-friendly chart showing each carrier’s proposed and approved rate change, along with whether or not the carrier sells plans in the exchange, and how many enrollees each carrier had at that point. In every case, the rates were approved as-proposed, although HealthPlus Insurance Company (off-exchange) had proposed a 38 percent rate increase and later withdrew their request, and Time Insurance Company also withdrew their proposed 37 percent rate increase, after their parent company announced their plans to exit the health insurance market nationwide. But no rate adjustments were made by DIFS during the review process.
Blue Care Network of Michigan and Blue Cross Blue Shield of Michigan had the majority of the individual market enrollees in Michigan in 2015 (65 percent combined, including on and off-exchange). Blue Care Network’s average rate increased by 9.7 percent, while BCBS of Michigan had an average rate increase of 11.4 percent.
Michigan’s individual health insurance market is one of the most robust in the country. There are 14 individual carriers that are offering roughly 200 plans for sale in the Michigan health insurance exchange for 2016 (two carriers – Time and Consumers Mutual – that offered exchange plans in 2015 have exited the market and are not offering plans for 2016). An additional six carriers are only offering plans outside the exchange.
Small group health insurance
For 2017, the average rate increase in the small group market is just 2.5 percent. But although the overall market is very robust, there are only three carriers that will continue to offer plans in the Michigan small business (SHOP) exchange in 2017: Blue Care Network of Michigan, Blue Cross Blue Shield of Michigan, and McLaren Health Plan Community.
That’s a decrease from six carriers that offered small business coverage in the exchange in 2016.
From 2013 to 2014, the percentage of Michigan small businesses (with fewer than 50 employees) offering health insurance dropped from 40 percent to 33 percent. But the lower rate is more in line with the historical average in Michigan, and is slightly higher than the 32 percent average nationwide. Small businesses with fewer than 50 full-time equivalent employees are not required to offer health insurance under the ACA. But if they do, they can use the SHOP exchange, and may qualify for small business health insurance tax credits if they do.
King v. Burwell – subsidies are safe
In June 2015, the Supreme Court ruled that subsidies are legal in every state, regardless of whether the exchange is run by the state or the federal government. The Kaiser Family Foundation estimated that if the King plaintiffs had won, premiums would have increased by an average of 294 percent for people who had been receiving subsidies in Michigan. And individual market enrollees who weren’t receiving premium subsidies would have seen rate increases of 60 – 90 percent in 2016 due to market destabilization that would have occurred had the subsidies been eliminated.
Following the Court’s ruling, Michigan Governor Rick Snyder said “We appreciate that the deep uncertainty of this issue has been resolved. The health and wellbeing of the people of Michigan is always a top priority. Our focus can now center on securing the second waiver for our Healthy Michigan Plan, which has been an outstanding success.”
Healthy Michigan Plan waiver, round 2
Snyder referenced the Healthy Michigan Plan waiver in his address after the King v. Burwell opinion because a ruling for the King plaintiffs would have been very detrimental for the state’s efforts to secure the waiver, and for the future of Michigan’s Medicaid expansion program.
Michigan’s Medicaid expansion program has enrolled nearly 607,000 people in coverage so far. The state expanded Medicaid under the ACA (effective April 2014), but it did so with a waiver, rather than straight expansion, because the state requires enrollees with incomes between 100 percent and 138 percent of the poverty level to contribute 2 percent of their income to health savings accounts. The program also allows participants to lower their cost-sharing based on participation in healthy behavior programs.
But a second waiver was required at the end of 2015, because under a state law enacted in 2013, Medicaid expansion for able-bodied adults is limited to 48 months for people with incomes between 100 percent and 138 percent of the poverty level. After that, they have the option of switching to subsidized private coverage in the exchange, OR staying in the Medicaid program but paying higher cost-sharing (up to 7 percent of household income, as opposed to the 5 percent cap normally imposed for Medicaid).
By the end of 2015 the state had to gain approval from the federal government to implement the program that calls for higher cost-sharing or a transition to subsidized coverage in the exchange after 48 months. Because subsidies were in limbo pending the outcome of the King case, the re-approval of the Medicaid waiver in Michigan was also in jeopardy prior to the Supreme Court’s ruling.
On September 1, 2015, Michigan submitted their waiver to CMS, and it was approved in mid-December. If it had not been approved, the Healthy Michigan program would have ended by April 30, 2016. This is despite the fact that less than 20 percent of the Medicaid expansion population in Michigan would be impacted by the state’s requirement that higher-income Medicaid beneficiaries would only be eligible for 48 months of coverage – if the waiver had not been approved, Medicaid expansion in the state would have terminated entirely.
In order to fund the state’s portion of Medicaid costs, Michigan imposes a 0.75 percent assessment (increasing to 1 percent in 2017) on health insurance carriers and third-party administrators. The assessment was scheduled to expire at the end of 2017, but HB5105, introduced in December 2015, extends the assessment out through 2020. HB5101 was passed by Senate in February 2016 and Governor Snyder signed it into law in March. Without the extension of the assessment, Michigan would have been in danger of losing federal matching funds for Medicaid costs, since their ability to pay the state portion of the costs would have been in jeopardy. Whether or not the assessment will continue to apply to self-insured health plan claims remains to be seen, as it’s the subject of an ongoing legal battle.
Michigan residents had pent-up demand for health insurance. Enrollment in both marketplace plans and Healthy Michigan, the state’s revamped Medicaid program, “blew through” projections for 2014 and beyond.
And, 2015 marketplace enrollment was even higher than the prior year’s. 341,183 Michigan residents selected a health plan on HealthCare.gov between Nov. 15, 2014, and Feb. 22, 2015.
Forty-two percent of those signing up were new to the marketplace for 2015. Eighty-eight percent of Michigan residents who selected a health plan qualified for financial assistance, which is just one point higher than the average for all states that use HealthCare.gov.
As expected, some enrollees didn’t pay their initial premiums, and others opted to cancel their coverage early in the year. HHS also stepped up enforcement of documentation requirements for immigration status and premium subsidies. By the end of June, 288,751 people had effectuated coverage in private plans through the Michigan exchange. Nearly 78 percent were receiving premium subsidies, and 54 percent were receiving cost-sharing subsidies.
Despite the robust enrollment, a University of Michigan study found that insureds – both those with Medicaid and those with private insurance – experienced no significant decrease in availability of primary care appointments following implementation of the ACA. In fact, for those with Medicaid, appointment availability actually increased from 2013 to 2014.
Although Michigan allowed insurers to extend transitional, or “grandmothered,” health plans until as late as September 2017 (that has since been extended until December 31, 2017), some insurers opted to discontinue their offerings in 2015. Grandmothered plans are not fully compliant with the ACA.
If you receive a notice that your plan is being canceled, you have several options. You can shop for new coverage directly through your current carrier, through an agent or broker, or through the marketplace at HealthCare.gov. You may also qualify for a hardship exemption for 2016 if your plan was canceled and you aren’t able to find an affordable replacement.
Penalties increased again for 2016
The ACA’s individual mandate requires most people to have health insurance or pay a penalty; however, there are quite a few exemptions.
For 2016, the penalty has increased to the greater of:
- 2.5% of annual household income above the tax filing threshold (the national average cost for a bronze plan in 2016 will be determined by the IRS once rates are finalized),
- $695 per adult and $347.50 per child under 18. Using this method, the maximum amount a family will pay is $2,085
Use the healthinsurance.org calculator to see if you may have to pay a penalty.
2014 enrollment recap
More than 272,500 Michigan residents signed up for qualified health plans during the first open enrollment period. Eighty-seven percent qualified for financial assistance, compared to 85 percent nationally. An HHS report shows the average monthly premium, after tax credits, for Michigan consumers as $97. Thirty-nine percent of enrollees paid $50 or less per month after subsidies.
Thirteen percent of Michigan residents selected a bronze plan (20 percent nationally), 75 percent selected a silver plan (65 percent nationally), 9 percent selected a gold plan (9 percent nationally), 2 percent selected a platinum plan (5 percent nationally) and 2 percent selected a catastrophic plan (2 percent nationally). Twenty-eight percent of Michigan enrollees were between the ages of 18 and 34.
Background on Michigan’s exchange efforts
Gov. Rick Snyder, a Republican, supported a state-run exchange for Michigan. However, he did not have the support of enough fellow Republicans to move ahead.
The Michigan attorney general joined 25 other states in challenging the Affordable Care Act. The Senate passed a bill to authorize a state-run exchange, but bill was voted down by the House’s Health Policy committee and didn’t get a floor vote.
Eventually, the state moved ahead with a state-federal partnership. Michigan is responsible for plan management, but left all other functions to the federal government.
When the King v. Burwell case was pending before the U.S. Supreme Court, Snyder again broached the topic of a state-run exchange to ensure Michigan residents have continued access to subsidies to pay for health insurance. Ultimately, the Court ruled that subsidies would continue to be available in every state, and Michigan did not have to consider a back-up plan to create a state-run exchange.
Michigan did accept federal funding to expand Medicaid under the ACA. Governor Snyder campaigned in 2014 on the success of the expansion program in the state, noting that Michigan had enrolled 63,000 more people than projected in 2014, just in the first eight and a half months of the year. From late 2013 until December 2015, total enrollment in Medicaid and CHIP in Michigan grew by 19 percent.
Michigan health insurance exchange links
Statewide network of non-profit agencies providing free enrollment support services to health insurance consumers