The Michigan insurance department announced this afternoon that rate 2018 rate increases for those receiving health insurance coverage on the Obamacare marketplace could average 27.6 percent in 2018.
Because of the implication by the Trump administration that it may not pay the Affordable Care Act (ACA) federal subsidies next year, the uncertainty created in the insurance industry has resulted in a wide range of rate estimates, according to the state Department of Insurance and Financial Services (DIFS).
The DIFS released the Michigan Health Insurance Rate Change Request Charts for both individual and small group policies in 2018, which shows proposed rate increases ranging from 16.5% to 59.4 percent. That outlier rate hike of nearly 60 percent would affect only about 2 percent of ACA participants and they would have the opportunity to switch insurance companies when the new Obamacare enrollment period begins on Nov. 1.
“Despite the uncertainty at the federal level, Michigan still has a number of companies participating this year, providing many choices for Michigan consumers,” said DIFS Director Patrick McPharlin. “Residents of every county in the state will be able to choose from at least two insurers, while some counties will have as many as eight or nine.”
The nine insurers participating across the state will offer a combined 115 health care plans on the marketplace, available at healthcare.gov. The department, after reviewing all the requested rate hikes, may reduce some of the increases.
Most individuals and families will be largely unaffected by the proposed rate increases because the subsidies, if they are maintained by President Trump, will offset the added expense.
The tax subsidies, known as the Cost Sharing Reduction (CSR) payments, are available to those ACA participants with an income of up to 250 percent of the federal poverty level, or $61,500 for a family of four.
Trump has indicated he wants to end the CSR payments to insurers. In the meantime, the allocations are made on a month-to-month basis.
Because of the volatile situation, the DIFS asked each insurer to provide a second set of rates that would apply if the CSR payments continue unabated in 2018. Those rates are lower.
“If we receive a commitment that the CSR payments will be made, we are hopeful insurers will be allowed to change to the lower set of rates,” McPharlin said.