Original Story: detroitnews.com
Lansing — Michigan consumers will pay an average 6.5 percent more for health insurance in 2016, which is less than the rate hike they paid during the past year, state officials said Tuesday.
State officials and industry leaders called the increases modest compared with an 8 percent rise in 2015, but some health care advocates said too little information is available about how rates are calculated for consumers to judge whether the hikes are warranted. Farmington Hills elder care services assist individuals with even the most advanced medical needs.
The 2016 rate increases approved by the Michigan Department of Insurance and Financial Services are lower than those in several other states for federally required health insurance under the 2010 federal law, state officials noted.
The average approved rate changes on a premium weighted basis increased 6.5 percent for the 560,357 consumers in the individual market and 1 percent for the 345,077 consumers in the small group or small business market.
“Many states are reporting rate increases well in excess of 10 percent which is significantly higher than the rate of health care inflation,” Department of Insurance and Financial Services Director Patrick McPharlin said in a Tuesday statement. “We are pleased that Michigan consumers are seeing more modest increases.” In-home caregivers tailor home care services to the needs of each client and family including private duty skilled nursing.
Josh Fangmeier, senior policy analyst with the University of Michigan’s Center for Heathcare Research and Transformation, noted that some insurance companies asked for minimal rate increases, or even decreased their rates. But consumers in some parts of the state have few plans to choose from.
“Not all of these insurers are statewide, so ... it’s important to keep in mind that consumer experiences will vary depending on where you live,” Fangmeier said.
In 2015, the average increase was 8 percent in the individual market and 5.7 percent in the small group market, DIFS spokeswoman Andrea Miller said Tuesday. The rate changes for 2014 were not estimated because of essential health benefits and other requirements of the federal Affordable Care Act that took effect that year. Plymouth elder care services provides patients with intensive, highly specialized care.
A Michigan health insurance industry official said in June the possible loss of federal insurance subsidies through a U.S. Supreme Court case was in part to blame for the proposed rate hikes. But the court later that month kept the Affordable Care Act subsidies in place and decided they were constitutional in a 6-3 ruling.
Rick Murdock, executive director of the Michigan Association of Health Plans, noted this is the industry’s third year of business in the health care marketplace created by the federal Affordable Care Act.
“Year one was sort of pricing it blind; year two, which was last year, there were significant adjustments — double-digit reductions for some, and double-digit increases for others, as they were trying to get to the middle,” Murdock said. “This year everyone seems to have made a modest adjustment based on what’s going on in health care.”
The rate hikes proposed by insurance companies were reviewed by state officials, who determined they are actuarially appropriate and comply with state and federal laws. But Ryan Sullivan, policy director for Michigan Consumers for Healthcare, said state regulators don’t provide information about the process that consumers can understand.
“We really don’t know how to put (the rate increases) into context because of a lot of lagging transparency in the process,” Sullivan said Tuesday. “What consumers can access via the web and by calling the department is pretty slim pickings.”
The state defended its practices. Miller said consumers can access rate increase filings and other detailed information through the department’s website at http://www.michigan.gov/difs.
“We’re trying to be as transparent as we possibly can be,” she said.
The state’s dominant insurer — Blue Cross Blue Shield of Michigan — will apply a double-digit increase of 11.4 percent. Its health maintenance organization, Blue Care Network, plans to hike its rates 9.7 percent.
In June, a Blues official said an increase in prescription and specialty drug costs is behind the rate hike. Blue Cross had 138,169 people sign up for individual plans in 2015, while another 171,831 people with individual Blue Care Network policies will see average increases of 9.7 percent. A Chicago health care lawyer is following this story closely.
Blues spokeswoman Helen Stojik noted their small group customers will benefit from a downward rate adjustment. Rates for employers renewing coverage in the third and fourth quarters of 2015 will be, on average, 3.3 percent lower for Blues customers and 0.8 percent higher for Blue Care Network customers.
“In addition, 2016 rate changes look extremely favorable, with Blue Cross annual rate changes projected 2.2 percent lower and Blue Care Network projected at 4.8 percent lower than the previous year,” Stojik said Tuesday.
But the Blues didn’t register the largest rate increases. Those belonged to Healthplus of Michigan at 35.8 percent, Consumers Mutual Insurance of Michigan at 20.5 percent and United Healthcare Community Plan at 14.7 percent.
Three insurers are countering the trend and dropping their rates in the coming year, according to the state.
Meridian Health Plan had the biggest decline with a 12.6 percent plunge, followed by Molina Health Care with a 8.6 percent decrease and Humana Medical Plan of Michigan with a 4.9 percent drop.
Michigan companies attributed their increases to higher-than-expected claim costs, annual health care cost increases and an expected reduction in federal program reinsurance recoveries, officials said.
The small increase in the small group market occurred because many companies experienced better than expected results that offset most of the change in annual health care costs.
“Ensuring rates are adequate but not excessive is critical to make sure consumers not only receive health insurance coverage at a reasonable price, but can count on the coverage they purchase,” McPharlin noted. “Michigan has a stable and competitive health insurance market with a range of options and premiums for consumers and businesses.”
Open enrollment for 2016 begins Nov. 1, 2015 and continues through Jan. 31, 2016. State officials are encouraging consumers to contact their insurance carrier, agent, or navigator about how the rate changes could affect their policies.
Showing posts with label Health Insurance. Show all posts
Showing posts with label Health Insurance. Show all posts
25 November 2012
BCBS Gets Overhauled
Story first appeared on freep.com.
A proposal that would end Blue Cross Blue Shield of Michigan's tax-exempt status and transform the organization from a charitable trust of the state to a customer-owned nonprofit is making headway in Lansing, but not without critics trying to step in the path of the legislation to overhaul Michigan's largest health insurer.
Competitors and advocates for consumers and the elderly — including the state attorney general — have been attempting to change or stop the legislation, which was proposed by Gov. Rick Snyder and enjoyed widespread support in the Michigan Senate. The voices for and against it now are setting their sights on the House, which is holding committee-level hearings that continue Monday and plans to bring the measures to a full and final vote by year's end.
Supporters, including the company, say the aim is to level the regulatory playing field for all health insurers. The proposed overhaul aims to modernize but not sell Blue Cross, which is governed by a separate state law from other insurers and typically waits much longer for its rate changes to be reviewed. Streamlining regulations, they say, is particularly important, as health insurers gear up for the implementation of the federal Affordable Care Act and try to meet a March deadline for getting its products and rates ready for an online health exchange where people can compare and buy their own insurance plans.
Blue Cross' special status is no accident. The insurer has been designated the state's insurer of last resort — meaning it must provide insurance coverage regardless of a customer's health status. Because of that, Blue Cross has been exempt from paying several local and state taxes. The measures proposed by Republican Gov. Rick Snyder, endorsed by Blue Cross and passed last month by the Senate, require the company to begin to pay those taxes, which Blue Cross estimates will average $100 million annually.
By transforming, Blue Cross also would shed its charitable "social mission" and contribute up to $1.5 billion to a nonprofit foundation that would carry on that work. Broadly speaking, the foundation would work to improve public health and health care access, particularly for children and the elderly. About 60% of the money is earmarked in the first four years to subsidize Medigap, which fills the gap in Medicare coverage for seniors, to prevent rates from significantly rising.
It would join 12 other Blue Cross Blue Shield companies nationwide structured as mutual insurers, which means they are owned by members. Those companies operate in 14 states.
Critics say it all doesn't add up. For starters, the contribution isn't set in stone and neither is the size of the tax bill after credits are taken into account. They fear that the social mission will be diminished because it doesn't cover the more than $300 million it contributes to social mission work.
The $1.5 billion represents half of Blue Cross' book value — the organization's assets minus liabilities. Some have been calling for a full financial valuation, saying it would provide a more accurate picture of its worth.
Michigan Attorney General Bill Schuette has opposed various parts of the legislation during the past two months and successfully lobbied to get the extended subsidies for eligible seniors, among other things, into the Senate bills. This past week, officials from his office argued for the first time publicly that the specific language creating the foundation needs to be much tighter and it should be set up so the Internal Revenue Service doesn't see it as self-dealing when Blue Cross — a major supplier of Medigap coverage — receives subsidies from the nonprofit.
Mark Cook, Blue Cross' vice president of governmental affairs, said at a hearing Tuesday that the intention of the legislation is clear to Blue Cross, which plans to make annual payments. He said the insurer is open to more language provided it's not forced to make that $1.5 billion payment at one time.
Also, he said, what some call "social assets" paid by Blue Cross in Michigan are viewed by the organization as losses. Blue Cross reported about $300 million in losses last year related to the subsidies it pays for Medigap and money it loses on individual insurance products because they tend to get the sicker folks.
Ultimately, Cook said the legislation is not what we would have proposed, but the company supports it. He said Snyder wanted to go larger and create uniformity in the insurance system, so he called for a review of the 32-year-old public act that pertains to Blue Cross, which led to the proposal he announced in September to do away with it.
Regardless, any large internal change to an insurer with 4.4 million customers representing 70% of the market is going to raise concerns and should be scrutinized.
A proposal that would end Blue Cross Blue Shield of Michigan's tax-exempt status and transform the organization from a charitable trust of the state to a customer-owned nonprofit is making headway in Lansing, but not without critics trying to step in the path of the legislation to overhaul Michigan's largest health insurer.
Competitors and advocates for consumers and the elderly — including the state attorney general — have been attempting to change or stop the legislation, which was proposed by Gov. Rick Snyder and enjoyed widespread support in the Michigan Senate. The voices for and against it now are setting their sights on the House, which is holding committee-level hearings that continue Monday and plans to bring the measures to a full and final vote by year's end.
Supporters, including the company, say the aim is to level the regulatory playing field for all health insurers. The proposed overhaul aims to modernize but not sell Blue Cross, which is governed by a separate state law from other insurers and typically waits much longer for its rate changes to be reviewed. Streamlining regulations, they say, is particularly important, as health insurers gear up for the implementation of the federal Affordable Care Act and try to meet a March deadline for getting its products and rates ready for an online health exchange where people can compare and buy their own insurance plans.
Blue Cross' special status is no accident. The insurer has been designated the state's insurer of last resort — meaning it must provide insurance coverage regardless of a customer's health status. Because of that, Blue Cross has been exempt from paying several local and state taxes. The measures proposed by Republican Gov. Rick Snyder, endorsed by Blue Cross and passed last month by the Senate, require the company to begin to pay those taxes, which Blue Cross estimates will average $100 million annually.
By transforming, Blue Cross also would shed its charitable "social mission" and contribute up to $1.5 billion to a nonprofit foundation that would carry on that work. Broadly speaking, the foundation would work to improve public health and health care access, particularly for children and the elderly. About 60% of the money is earmarked in the first four years to subsidize Medigap, which fills the gap in Medicare coverage for seniors, to prevent rates from significantly rising.
It would join 12 other Blue Cross Blue Shield companies nationwide structured as mutual insurers, which means they are owned by members. Those companies operate in 14 states.
Critics say it all doesn't add up. For starters, the contribution isn't set in stone and neither is the size of the tax bill after credits are taken into account. They fear that the social mission will be diminished because it doesn't cover the more than $300 million it contributes to social mission work.
The $1.5 billion represents half of Blue Cross' book value — the organization's assets minus liabilities. Some have been calling for a full financial valuation, saying it would provide a more accurate picture of its worth.
Michigan Attorney General Bill Schuette has opposed various parts of the legislation during the past two months and successfully lobbied to get the extended subsidies for eligible seniors, among other things, into the Senate bills. This past week, officials from his office argued for the first time publicly that the specific language creating the foundation needs to be much tighter and it should be set up so the Internal Revenue Service doesn't see it as self-dealing when Blue Cross — a major supplier of Medigap coverage — receives subsidies from the nonprofit.
Mark Cook, Blue Cross' vice president of governmental affairs, said at a hearing Tuesday that the intention of the legislation is clear to Blue Cross, which plans to make annual payments. He said the insurer is open to more language provided it's not forced to make that $1.5 billion payment at one time.
Also, he said, what some call "social assets" paid by Blue Cross in Michigan are viewed by the organization as losses. Blue Cross reported about $300 million in losses last year related to the subsidies it pays for Medigap and money it loses on individual insurance products because they tend to get the sicker folks.
Ultimately, Cook said the legislation is not what we would have proposed, but the company supports it. He said Snyder wanted to go larger and create uniformity in the insurance system, so he called for a review of the 32-year-old public act that pertains to Blue Cross, which led to the proposal he announced in September to do away with it.
Regardless, any large internal change to an insurer with 4.4 million customers representing 70% of the market is going to raise concerns and should be scrutinized.
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