Blue Cross Blue Shield of Michigan continues to keep rate increases in check for small business
In contrast to national trends, Blue Cross Blue Shield of Michigan today announced a comparatively small statewide average rate increase of 2.9 percent for small group employers in 2017, pending state regulatory approval. This follows rate reductions that Blue Cross delivered to small employer group customers that renewed during the second half of 2015.
Health insurance rate moderation for small employers in Michigan is a result of Blue Cross’ emphasis on delivering more cost-efficient health practices to the market and successful collaboration between physicians and hospitals across the state to provide an enhanced quality of care for Blue Cross and Blue Care Network members.
“Maintaining reasonable costs for our customer groups is a top priority for Blue Cross, as more than 225,000 of our members receive health care coverage through small business employers,” said John Dunn, vice president for Middle and Small Group Business at Blue Cross Blue Shield of Michigan. “Blue Cross strives to offer our business customers options they can afford in order to remain competitive and provide high quality health coverage to their workforce.”
Blue Cross has made significant efforts to bring more affordable health plan options to the market and promote better health for members. These efforts include the company’s value-based reimbursement programs with providers and the nation’s largest Patient-Centered Medical Home initiative. The Medical Home initiative has not only improved the quality of health care in the state, but also contained costs. Coupled with more than 25 other Value Partnerships programs designed to improve the quality of care, this has enabled Blue Cross to manage rates at a level significantly below the national average.
Marketplace rates are largely influenced by geographic location, followed by age, family size and tobacco use and some U.S. states are experiencing small group rate increases of more than 10 percent. Still, small businesses are committed to providing benefits to their employees, with just seven percent confirming the likelihood of dropping coverage in the next five years.
“The erosion of the small group market predicted by many following passage of the Affordable Care Act simply isn’t happening here in Michigan,” Dunn said. “Instead, we are seeing an increasing number of small employers offering coverage.”
“Blue Cross has seen an increase in small business customers providing coverage by eight percent in the past eight months,” Dunn said. “Many employers have continued to provide benefits for their employees under the new law and some are even offering health coverage for the first time. The growth in this sector in Michigan means more people have access to the care they need.”
The increasingly competitive job market has become a major driver in employers’ decisions regarding benefits. According to a survey conducted by Collective Health, 75 percent of employees rated health and retirement benefits as a top factor in considering a job offer. Further, 80 percent of human resource professionals cited health benefits as a key tool in retaining talent. To remain competitive in their respective industries, businesses are realizing the importance of these kinds of compensation packages.
Small businesses can help manage the costs associated with employer-provided health care through the promotion of wellness programs and helping employees better understand how to use the health care system by engaging in regular, preventative care and using cost transparency tools.
Last year, Blue Cross provided rebates to group customers and lowered rates 3.3 percent for Blue Cross customers. Average rate adjustments will be effective for Blue Cross and Blue Care Network customers renewing in the third and fourth quarters of 2016, and the first quarter of 2017.
Blue Cross Blue Shield of Michigan, a nonprofit mutual insurance company, is an independent licensee of the Blue Cross and Blue Shield Association. BCBSM provides and administers health benefits to more than 4.5 million members residing in Michigan in addition to employees of Michigan-headquartered companies who reside outside the state. For more company information, visit bcbsm.com and MiBluesPerspectives.com.