DAVID EGGERT, Associated Press
LANSING (AP) — Blue Cross Blue Shield and Blue Care Network, which sell medical insurance to more than half of Michigan residents who buy their own coverage under the federal health care law, are seeking 2016 premium increases that average about 10 percent, the state insurance department announced Monday.
Blue Care Network of Michigan and Blue Cross Blue Shield of Michigan together cover 310,000, or 55 percent, of the 562,000 residents who purchase insurance individually. They are seeking average premium increases of 9.7 percent and 11.3 percent respectively.
Other companies with large portions of the individual market include Humana Medical Plan of Michigan and Priority Health, which have a combined 149,000 customers. Humana wants to lower rates by 4.9 percent, while Priority plans to raise them by 3.4 percent on average.
The companies' suggested premium changes are composites and do not reflect how an insurer's or HMO's premiums compare with others. Customers renewing their coverage may see bigger or lower increases depending on their plan, where they live and if they smoke.
The 2010 Affordable Care Act requires nearly all Americans to carry health insurance or face fines. It subsidizes private health insurance for people who do not have access to job-based coverage or make too much to qualify for Medicaid.
The rate hikes are subject to change pending state review. When the Blues sought nearly 10 percent increases a year ago, they were approved as filed.
Rick Notter, Blue Cross' director of individual business, said higher premiums are needed primarily to account for rising "medical trend costs" in areas such as specialty medicines. U.S. spending on prescription drugs soared last year, driven up partly by costly breakthrough drugs for complex, chronic and often expensive disorders including hepatitis C.
Other reasons for the rate increase include a federal change involving out-of-pocket maximums and the U.S. government's winding down of a reimbursement program that helps insurers cover people with very expensive medical conditions, Notter said.
Both state and Blue Cross officials said customers would not necessarily see their premiums rise or fall in line with the rate hikes if they qualify for tax credits. The subsidies for 2016 will not be known until closer to the third annual enrollment period that opens Nov. 1.
"We worked quite a bit with consumers last to keep them in a plan they could afford," Notter said.
The state will accept public comments on the rate changes through July 1.
The Department of Insurance and Financial Services "is committed to transparency in the rate review process," said director Patrick McPharlin.
President Barack Obama's administration likely will approve whatever Michigan regulators decide.
Individual policy requests: http://1.usa.gov/1BE5SPY
Small group policy requests: http://1.usa.gov/1Kz4d3k
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