- Some major insurers are said to be leaving the state’s Affordable Care Act exchange
- About 530,000 state residents who get their health insurance on the individual market are facing a 16.8% rate hike
- Some analysts estimate 64,000 people in Michigan will go uninsured next year
With less than two weeks until open enrollment starts, thousands of Michigan residents face a triple challenge.
Not only are premiums going up, but thousands of people who get their health insurance through the Affordable Care Act marketplace may be forced to switch plans because their providers are either fleeing the state’s ACA exchange or scaling back coverage. In addition, it’s uncertain whether enhanced premium subsidies for ACA plans will continue.
About 200,000 individuals may be unable to renew with their current insurer, Joe Sullivan, director of the Office of Innovation and Research at the Michigan Department of Insurance and Financial Services (DIFS), told state lawmakers this week.
Some providers have had to “reevaluate their position” in the state, Sullivan said, amid a federal overhaul of coverage in the Trump era and the ongoing debate over health care subsidies, which are a central issue in the government shutdown.
Members of Congress have been wrangling over a temporary spending plan, and whether it will include an extension of an “enhanced” ACA premium tax credit benefiting millions of Americans.
“The volatility caused by the inaction on enhanced premium tax credits and marketplace reforms have led to a variety of types of withdrawals, including issuers declining to offer certain plan types or remain in certain areas of the state, some withdrawals from just the marketplace or withdrawals from the individual market as a whole,” Sullivan told the Michigan Senate Health Policy Committee on Wednesday.
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Hints of Michigan’s changing health care landscape are already appearing on the horizon:
- HAP CareSource notified the state in September it would discontinue its individual marketplace plans for nearly 19,000 enrollees.
- Michigan Medicine is dissolving its UM Health Plan, formerly known as the Physicians Health Plan (PHP), affecting 64,000 enrollees in the Lansing area, citing “significant financial losses over the past few years.”
Several health insurance brokers — including Cornerstone, MRW Solutions Group and Agility Insurance Services have warned their Michigan customers of other carriers pulling out. Those said to be scaling back in Michigan include Ambetter Health, from Meridian Health Plan, and Molina Healthcare, which has about 36,000 individuals on the exchange. Neither company immediately responded to Bridge Michigan’s request for comment.
Proposed rate hikes
Whether covered by ACA or an employer, Michigan residents can expect to pay more for health insurance in 2026, according to the rate requests insurers submitted over the summer to the Michigan Department of Insurance and Financial Services.
The state is expected to post approved rates once open enrollment starts on Nov. 1, but projections show nationwide, the average ACA plan will rise by 30%.
Michigan’s health insurance providers requested an average rate hike of 16.8% for the insurance policies sold to individuals, including plans they offer on the ACA marketplace. Those policies cover 530,000 people in Michigan.
In all, 121 of 251 individual plans have a proposed rate hike of 15% or more. One hundred seventy-eight plans, including those provided by Blue Cross Blue Shield of Michigan and Priority Health, will be listed on the ACA health care marketplace.
Small group plans, which cover some 412,000 people working at companies with 50 or fewer employees, are set to see an average rate hike of 11.1%.
Large business plans, which are usually exempt from state insurance mandates, are expecting their largest rate increases in 15 years — 6.5% on average — according to the global consulting firm Mercer.
Sullivan said 90% of state residents who get their plans on the ACA individual market also take advantage of enhanced premium tax credits, saving an average of more than $380 a month.
Those subsidies were temporarily expanded during the COVID-19 emergency and extended in subsequent legislation under the Biden administration, but are slated to expire at the end of the year.
“An estimated 40,000 Michigan families currently enrolled in coverage through HealthCare.gov will no longer receive any premium tax credits,” Sullivan said.
Without an extension, Sullivan said rates are expected to rise for every resident who enrolls in health care coverage.
A ‘double whammy’
Rachel Richards, the fiscal policy director for the Michigan League for Public Policy, told lawmakers in a hearing of the Senate Health Policy Committee this week that households will see a “double whammy” in rate hikes next year — the forecasted rise in costs and the loss of the enhanced premium tax credits.
“A 60-year-old Michigan couple that’s making roughly $82,000 a year would see their annual premiums increase from just shy of $7,000 a year to more than $20,000 a year,” Richards said.
Changes in HR 1, or the One Big Beautiful Bill Act, will also eliminate automatic reenrollment, which Richards says was used by more than half of marketplace users this year.
The resulting changes will result in 108,000 fewer Michiganders being covered on the marketplace next year, according to an analysis from the Urban Institute. The DC-based think tank estimates 64,000 people in the state will go uninsured in 2026.
Michigan’s health insurer lobbyists have joined the chorus of those voicing concerns about the upcoming rate hikes.
“If these tax credits are allowed to expire, the impact will be immediate and severe,” Christine Shearer, deputy director of legislation and advocacy for the Michigan Association of Health Plans, told the committee.
“The potential loss of federal tax credits, combined with rising medical inflation and escalating prescription drug costs could result in some of the steepest premium increases seen in nearly two decades.”
The health plan association is advocating for policy solutions to address the forthcoming changes.
The group says a Basic Health Program, which would provide insurance coverage for individuals just above the Medicaid income threshold could help, along with small business assistance funding, state employee insurance reform and expanding access to association health plans to allow smaller businesses to purchase plans in the large group market.
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