Michigan residents are bracing themselves for double-digit increases in prices for individual plans on the state’s Obamacare exchange.
The sticker price for individual plans on Michigan’s Obamacare exchange is set to go up to 16.7 percent next year and will go into effect starting November 1, 2016, when open enrollment on Healthcare.gov begins again, the Detroit Free Press reported.
Most people in Michigan do not pay the full sticker price for Obamacare because of the tax credit subsidies available to those who qualify, which increase as the premiums increase.
This means that the cost of insuring people who get subsidies is ultimately shifted to the taxpayer.
Insurers are calling for higher rates because of rising health care and prescription drug costs, larger-than-expected insurance claims, and the end of a federal reinsurance program that gives money to plans with members who have very high claims.
Insurance companies originally sought rate increases of 17.2 percent before the rates were approved by regulators.
Most insurance companies who sought rate increases in Michigan got their rate increases in full. This included a 14.8 percent increase for Blue Care Network, 18.7 percent for Blue Cross Blue Shield, 16.8 percent for Health Alliance Plan, a 13.9 percent increase for Priority Health, and an increase of 39.2 percent for Humana.
Aetna and Alliance Health were the exceptions, since they did not get their approved rate increases in full.
Still, insurers such as Blue Cross Blue Shield insist that they are losing money on the exchanges and are not trying to profit off the exchange’s plans.
A few insurance companies have even pulled out of the exchange, such as HMO plans by Harbor Health and UnitedHealthcare and PPO plans by Priority Health and Alliance Health, according to the state’s insurance department.