Costs drop for Michigan Obamacare insurance. But only after crazy increases

Obamacare insurance enrollment in Michigan opens Friday with good news — premiums costs are down 2.5 percent. But costs still are above the jaw-dropping, double-digit price increase two years ago.

“It's not where we should be, but it’s certainly better than it was,” said Marianne Udow Phillips, executive director of the Ann Arbor-based Center for Health Research & Transformation, or CHRT, which studies health care trends.

The price drops mean that 52 percent of those who buy insurance from the  Michigan Health Insurance Marketplace could have access to plans that cost $10 a month or less if they qualify for government subsidies, according to Joshua Peck, co-founder of Get America Covered, a left-leaning consumer advocacy group founded by two former Obama administration officials.

The Michigan Health Insurance Marketplace largely serves those who don’t get health coverage through Medicare, Medicaid or their employer.

Enrollment starts Friday for plans for 2020 coverage on the Marketplace, which in Michigan and 37 other states is accessed through the government portal, www.healthcare.gov. The Marketplace, which provides individual assistance for shoppers trying to navigate the complicated world of insurance, was established as part of the federal 2010 Affordable Care Act, or “Obamacare”, and last year covered nearly 333,000 Michiganders.

Enrollment ends Dec. 15 for health coverage throughout 2020. After the deadline, consumers can get coverage only if they have a qualifying life event, such as having a child, losing coverage through an employer, or getting married or divorced.

Blue Cross Blue Shield and Blue Care Network, which together cover the lion’s share of Michigan’s Marketplace, are dropping their by 1.7 percent and 7.7 percent, respectively.

Molina Healthcare of Michigan, which offered eight plans covering 6,742 Michiganders in 2019, planned to drop the cost for its premiums by 8.8 percent, while Oscar Health, an online newcomer to the field last year with 10 plans covering fewer than 700 Michiganders, has proposed an 8.3 percent increase.

But consumers must shop carefully. 

The overall drop is a sweeping average of rate changes among nine Michigan insurers on this year’s Marketplace. Actual rates can vary significantly among plans and even county to county.

Prices also vary depending on a consumer’s age and smoking status, the county of residence, and the type of plan — from a lower-cost bronze plan, which covers less care that’s outside normal preventative services, to a platinum plan, which costs more but offers more coverage.

And the cost of a premium that has decreased still might cost more than a premium that has increased in cost.

“Maybe the one [plan] going down [in price] was $1,000 last year but the one going up [in price] was $500 last year,” said Karen Dennis, director of the Michigan Department of Insurance and Financial Services’ insurance rates and forms office.

Plus, year-to-year changes in income, for example, significantly changes final prices for individuals and families. As part of the Affordable Care Act, consumers whose income is up to four times the federal poverty level ($25,750 for a family of four) are eligible for a sliding scale of subsidies that can help lower costs.

Finally, even if everything else remains the same, a plan from year-to-year may shift costs to the consumer in other places — a higher office co-pay, for example, Dennis noted.

The price drops don’t make up for increases that averaged 27 percent across Michigan’s “Obamacare” plans just two years ago.

Insurers in 2013 set prices on wildly unknown variables. Among them: how costs would be affected by demand from previously uninsured customers or mandatory benefits required by the Affordable Care Act.

Ed Haislmaier, senior research fellow with the Heritage Foundation, a conservative think tank based in Washington, D.C., said the surge in prices for 2018 coverage reflected necessary market adjustments.

He said the premium decreases mean the market is “stabilizing and plateauing” after an “inflection point in 2018,” when insurers spiked rates to compensate for lagging costs.

Cynthia Cox, vice president at Kaiser Family Foundation, a San Francisco-based nonprofit focused on major health care issues, agreed: “We sometimes look at premium increases as a sign of failure, but in retrospect, the fact that insurers came in with these low, low prices was the failure.”

Insurers, she added, “have to price high enough to break in or make a profit to be interested in the marketplace.” 

Some also blame the Trump administration which in 2017 ended cost-sharing payments to insurers. In response, insurers shifted the costs to consumers, said Nancy Baum, a policy analyst at the Center for Health Research & Transformation.

Whatever the cause, consumers felt it in their wallets.

A benchmark plan — considered the second-lowest cost silver plan — for a 40-year-old Michigander cost $254 a month in 2014, rising steadily to $278 in the 2017 coverage year. But after uncertainty and change at the federal level, rates shot up to $381 for coverage in 2018, then leveled off last year at $383, according to the Kaiser Family Foundation.

This year’s precise rates will be available when the Marketplace opens Friday with nine insurers — what Anita Fox, the director of the state’s insurance department, called “a strong lineup of insurers.”

In fact, marketplaces in two states — Wyoming and Delaware — have just one insurer providing coverage in 2020, according to the U.S. Centers for Medicare & Medicaid Services.

The Marketplace opens for the sixth year against lingering uncertainty.

In addition to pulling back cost sharing payments to insurers in 2017, Congress passed the Tax Cuts and Jobs Act of 2017, essentially voiding the rule and, in turn, setting off another court challenge to the Affordable Care Act.

And some advocates worry that changes by the Trump administration have created confusion that could mean drops in enrollment. Funding has been pulled from programs that help consumers enroll, and the enrollment period — once more than two months long — has been clipped to about six weeks.