Blue Cross Blue Shield of Michigan Will Continue to Offer ACA Marketplace Health Plans in Every Michigan County for 2018 Open Enrollment
by Meghan O'Brien
| 3 min read
DETROIT, June 14, 2017 – At the request of Michigan regulators, Blue Cross Blue Shield of Michigan filed two sets of rates for its 2018 individual health plans – the first step in continuing to participate in the individual health plan market regulated by the Affordable Care Act, also known as Obamacare. The two sets of rates reflect plan premiums with, and without, the inclusion of $166 million in federal funds paid in 2016 to Michigan health insurers to help them lower cost-sharing amounts for people with incomes up to 250 percent of the federal poverty level. The fate of cost-sharing reduction (CSR) funding remains in question as federal officials determine whether it will be included for 2018. BCBSM will continue to offer a significant choice of different individual plan options – with a total of 34 plans across Gold, Silver, Bronze and Catastrophic levels – and will continue to provide coverage in all 83 Michigan counties. “Since the ACA became law, Blue Cross has offered statewide access and multiple plan options to Michiganders who need to buy coverage on their own,” said Daniel J. Loepp, president and CEO of BCBSM. “As political and economic forces continue to affect a volatile individual market, Blue Cross’ focus is providing the access and choice Michigan’s people depend upon. Affordability is also critical, and CSR funding is vital to help us keep costs within reach for lower-income people. We encourage policymakers in Washington to support it.” If CSR funding continues, average rate increases for BCBSM individual products would be 26.9 percent, and BCN products would increase 13.8 percent on average, pending regulatory approval. However, if CSR funding disappears, average premium increases would be significantly higher – 31.7 percent for BCBSM and 22.6 percent for BCN, pending approval. Premium increases result from several factors in Michigan’s individual health insurance market that work together to put a strain on the ability of insurers to keep prices low. These include:
- Skyrocketing drug prices. Prescription drug costs have grown 73 percent for BCBSM over the past seven years. Specialty drugs – expensive drugs with no market competition used to treat very serious health conditions – are putting a big strain on insurance affordability. The average cost for a specialty drug is $54,000. Only five percent of individual members use specialty drugs, but they account for 50 percent of all pharmacy costs for BCBSM.
- People dropping coverage. About 20 percent of BCBSM individual enrollees drop coverage after receiving health services. This drives up costs for people who stay insured as the law requires.
- Young people staying out. Younger and healthier people continue to decline to be covered, leaving people with higher health costs in the insurance pool. This drives up the cost of insurance over time.
- Other insurers abandoning consumers. BCBSM currently offers the only PPO plan in Michigan’s individual market. Other insurers have given up PPO offerings, which are traditionally more attractive to people with more chronic conditions and higher health costs. This has driven costs higher within BCBSM’s insurance pool.
“We are very aware of the strain that people are feeling, because we talk with our customers every day,” said Terry Burke, BCBSM vice president for individual business. “We are focused on pricing responsibly, providing many options for people to switch into should their premium get beyond their reach, and keeping our coverage available everywhere in Michigan.” 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.