Michigan – Health insurance providers in Michigan are preparing for major rate hikes in 2025, which may affect around 900,000 people. A recent analysis by the Michigan Department of Insurance and Financial Services (DIFS) indicates that for individual plans, insurers have recommended average increases of 10.7%; for small group coverage, of 11.2%.
These plans mostly serve companies and firms with less than 51 workers as well as people shopping for insurance using the Healthcare.gov website. With last year’s approved increases averaging 7% for small groups and 5.3% for individuals, the rate increase proposals stand highest in recent years.
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Thanks to the tax credit subsidies in the Affordable Care Act, many Michigan citizens who purchase their insurance through the Healthcare.gov marketplace may not feel the full impact of these possible increases. These subsidies are meant to balance growing insurance costs and income fluctuations.
Starting in 2021, further subsidies for middle-income earners are also scheduled to last through 2025, therefore easing some financial load. These are a component of a federal project running roughly $22 billion yearly.
Affecting approximately 276,200 individuals, Michigan’s biggest insurer, Blue Cross Blue Shield of Michigan, is looking for more than an 11% hike for its small group policies. The hikes are rather smaller for its individual market plans; average for HMO plans is just under 9% and for PPO plans is 7.5%.
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Blue Cross attributes the need for higher rates to an uptick in claims across all medical services—both inpatient and outpatient—as well as significant pharmacy cost trends. Emphasizing their efforts to control growing medical and pharmaceutical costs, Blue Cross claims to have maintained the average increase for its small group plans under 5% over the past four years despite these problems.
Based in Grand Rapids, another big insurer, Priority Health, is advocating even more dramatic raises. For its small group plans, the corporation has suggested an average 13.2% rise; for its individual market policies, it has suggested a staggering 18.9% rise. Priority Health defends these fees with the rising cost of prescription pharmaceuticals, especially GLP-1 drugs for diabetes and obesity, and a more demand for medical services.
Priority Health says that four out of five customers in the individual market may acquire a plan costing $10 or less per month when federal tax credits are applied despite these hikes. With over 90 cents of every dollar spent on member care, the insurer stresses its dedication to keep reasonable rates that guarantee access to quality treatment.
These rate recommendations won’t be approved until October as they are pending public review. DIFS has finished its public comment session in the meanwhile and is going over the comments; judgments made here will greatly affect Michigan’s healthcare insurance scene by 2025.