Affordable Care Act insurance rates rising in Michigan


LANSING, Mich. (WOOD) — If you get health care coverage through the Affordable Care Act, you may soon be paying more.

State officials have approved an average price hike of 16.7 percent for individuals enrolled through the Affordable Care Act.

“It’s a big increase we haven’t seen. Last year was (a) 2.5 percent increase. Compared to last year and what we saw the year before, (this is a) pretty big increase. When you look at other states that have announced their increases, North Carolina (is) 24 percent (and) Pennsylvania (is) 33 percent,” said Leslie Muller, an assistant professor of economics at Grand Valley State University.

The increase was approved by the Michigan Department of Insurance and Financial Services.

“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,” department director Patrick McPharlin stated in a news release.

More than 393,000 people in the state of Michigan are currently enrolled in the individual government-run marketplace.

Reasons for the increase vary depending on who you ask. White House officials say it’s because insurers set prices too low to begin with, looking to gain big market shares. The insurers say people are sicker than expected and enrollment didn’t live up to their expectations.

“It could be a one-time increase; the insurers have looked back and say, ‘We have been in this a couple of years, we’ve been making losses and so we just can’t do this anymore.’ And rather than pull out of the marketplace, they are increasing their premiums,” Muller said.

The good news: most people who purchase through the ACA don’t have to pay the full price because they qualify for ACA’s tax credit subsidies.

“The majority of the people on the exchanges are getting federal subsidies… nationally about 80 percent, so the vast majority are getting subsidies. When premiums go up, subsidies go up so they’re not going to see hardly, very, very minimal increases,” explained Muller.

The approved average hike for the small group market, which is employers with fewer than 51 employees, was 2.5 percent.

“You have to give the market a few years to shake out and insurers have to see (if they were) charging too low premiums (or) charging too high, because they had never done something like this before,” said Muller.

The price hikes will take effect Nov. 1 when open enrollment begins.

Online:Michigan ACA health insurance rate change

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