What Healthcare Insurance Rate Increases Mean for Michigan Small Business Owners

Date: July 17, 2017


Michigan providers increased rates for individual health insurance dramatically next year, a direct response to the Affordable Care Act’s uncertain future, hikes in drug prices and the growing demand for services. The jump in rates discriminately impact small business owners without group coverage and their employees.

Because it remains undecided whether the government will continue to offer cost-sharing subsidies, Michigan regulators required insurers to propose two different sets of individual health insurance rates, accounting for whether the subsidies are included or not. The two sets of rates requested are roughly 10 percent to 50 percent higher than what an expected increase might be considering only increasing drug prices and medical service use, according to Crain’s Detroit Business. The increases are also predicted to be significantly larger than the 16.7 percent state-approved increase this year.

“The political climate continues to make it difficult to price and the uncertainty over the future of the subsidies creates the largest reason for significant rate increases,” Meridian Health’s Michigan director of operations Danielle Devine said.

The filed plans for 2018 reveal that many Michigan insurers are asking to raise their sale of health insurance to small employers by less than 5 percent, a small but considerable hike. Some plans did request cuts to small group rates, however.

Even though the spikes in rate requests are contingent upon whether or not the federal government will pay the subsidies, Michigan insurers aren’t holding their breath. There has yet to be any proposed legislation in the House or in the Senate allocating cost-sharing funding to balance out the individual health insurance market next year, experts told Crain’s Business.

In August, insurance commissioners will finalize their price decisions. In the midst of such uncertainty, employers might be facing record-setting increases to premiums in 2018, unless the government promises to pay the subsidies.


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