I'm not the type of guy to sugar coat things. Obamacare is struggling. Many healthy individuals are dropping coverage. Mark Bertolini, CEO of Aetna, said, "As the rates rise, the healthier people pull out because the out-of-pocket costs aren't worth it. Young people can do the math. Gas for the car, beer for Fridays and Saturdays, or health insurance." The cost of health insurance on the individual market rose by an average of 25 percent. As more and more healthy people leave the health insurance market there's less funds available for the insurers to use to cover the higher costs of unhealthy individuals. Thus leading to bigger premium increases, causing even larger exodus of individuals from the market. How long can the health insurance market sustain this vicious cycle?
So what does the Michigan market look like for 2017? Premiums increased an average of 16.2 percent, according to the Department of Insurance and Financial Services. These increases range from 3.2 percent for Molina Healthcare to 39.2 percent for Humana. PPO plans are on the chopping block. Priority Health eliminated all of their individual PPO plans. Other carriers chopped an overwhelming majority of their PPO plans, but maintained some options. HMO networks are being narrowed down geographically. And the worst part of all, subsidies stayed virtually flat, due to Molina Healthcare only increasing 3.2 percent.
The bottom line is this, if you want to keep your current plan in Michigan (that is considering the insurance companies didn't eliminate it) you will be stuck with almost the full amount of the increase. If you want to keep your rate the same as you were paying last year, you have to switch to Molina Healthcare.
But like I said before, it's not hopeless. If you live in the Metro Detroit area there are 83 plans available for you to choose from. The important things to consider are; will you choose a more expensive plan to keep your current doctor, or are you willing to change doctors? Are you tied to one particular insurance company, or would you switch to a new carrier? Does the plan cover your medical expenses before or after you have to meet a large deductible? Does it make sense to pair a high-deductible plan with supplemental accident, critical illness or hospital indemnity plans?
The silver lining for 2017 is that insurance companies are coming up with new options to offset the rising costs and decreasing coverage. It's becoming more of an a la carte system focused on supplemental plans to offset the high deductibles. That is the trend that Michigan is following for 2017. So if you're young and healthy, don't blow all your money on beer. It's important to have some insurance, so work with an insurance agent to choose the right coverage for you.
Written by David Engle, President, LYFE Benefits & Insurance Solutions LLC