Modest Rate Increases for 2016 Health Plans – Individual Market to Increase on Average 6.5%, Small Group 1.0%

LANSING – Michigan consumers and small businesses will experience lower increases in the cost of their 2016 health insurance plan than those in many other states, according to the Michigan Department of Insurance and Financial Services (DIFS). DIFS reports that the average approved rate changes on a premium weighted basis increased by 6.5 percent for the individual market and 1 percent for the small group market.

“Many states are reporting rate increases well in excess of 10 percent which is significantly higher than the rate of health care inflation,” said DIFS Director Patrick McPharlin.   “We are pleased that Michigan consumers are seeing more modest increases.”

DIFS completed the review of health insurance rate change requests for the individual and small group markets and determined that the requested rate changes were actuarially supported. As in prior years, DIFS conducted a thorough examination of each company’s rate change request. This examination included review of public comments received throughout June 2015 following the posting of the rate change requests.   Credentialed actuaries evaluated the rates, consistent with rate review requirements, to ensure compliance with State and Federal laws.

“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,” states Director Patrick McPharlin. “Michigan has a stable and competitive health insurance market with a range of options and premiums for consumers and businesses.”

DIFS has updated its Rate Change Request Charts to include the final approved rate changes for each company. These rate changes affect about 900,000 Michiganders enrolled in individual or family policies or through their small group employer. Michigan’s premium increases are the result of a number of factors that vary by market. In the individual market, Michigan companies attributed the change to annual health care costs, the expected reduction in Federal program reinsurance recoveries, and higher than expected claim costs. In the small group market, many companies experienced better than expected results, offsetting the expected increase due to the change in annual health care costs.

Open enrollment for 2016 begins November 1, 2015 and continues through January 31, 2016. Consumers are encouraged to contact their insurance carrier, agent, or navigator regarding how these rate changes could affect their policy. There are also shopping tools, rate comparisons and resources available on the DIFS Health Insurance Consumer Assistance Program’s (HICAP) website, www.michigan.gov/hicap and the Healthcare.gov website.

For more information about DIFS or the services provided, please visit the website at www.michigan.gov/difs or follow them on Twitter.