Blue Cross Blue Shield of Michigan and Priority Health remain committed to selling individual health policies on the state’s public insurance exchange, even as a chief competitor opts to drop out of the market for next year.
Detroit-based Health Alliance Plan said today it was withdrawing from the Health Insurance Marketplace for 2018 and will only sell individual policies directly. HAP attributed the decision to volatility and uncertainty facing the market, including questions of whether the federal government will continue cost-sharing subsidies to carriers for people who qualify for assistance.
Despite the uncertainty in the market, executives at Blue Cross and Grand Rapids-based Priority Health say they’re staying in for now.
“We’re committed to the individual currently and ongoing,” said Rick Notter, director of individual business for Blue Cross Blue Shield of Michigan and its HMO subsidiary, Blue Care Network.
“We’re going to stay in it as long as possible. Obviously, it’s difficult to predict year to year what’s going to happen … but as of now, we have no plans to exit the market,” Notter said.
“We realize there’s a lot going on and it’s a volatile market,” he said. “We are committed to the people in the state to make sure we provide them with plans that are hopefully affordable.”
Blue Cross Blue Shield has more than 59,000 enrollees in individual plans purchased through the public exchange, according to a recent state summary on 2018 rate proposals from insurance carriers. Blue Care Network has about 116,000 enrollees.
Blue Cross Blue Shield has not suffered the same deep losses on public exchange policies as other insurance carriers, “but it hasn’t been easy,” Notter said.
Priority Health, which has a little more than 48,000 individual policies sold on the public exchange, is preparing to unveil a new suite of individual products, and remains committed as well to the market for 2018, Chief Marketing Officer Marti Lolli said.
Changes in the law at the federal level, as well as action by the state, could help to reduce volatility and stabilize the individual market, Lolli said. Priority Health wants “to stay the course in that market” for the long term, she said.
“We feel is it important for us to keep affordable options for that market as well, so we’re going to continue to serve them in that capacity,” Lolli said. “If the market has a couple of stability mechanisms, it is possible to achieve a level of affordability and sustainability.”
The rates for the individual market are important not just to people who purchase their own policies on the exchange but to small business employers as well, Lolli said. Small businesses considering whether to drop group health benefits generally want to know what their employees will face in the individual market, she said.
“Employers want to know what that individual market is going to look like. They’re trying to understand whether they should continue to offer health care benefits. What’s going on in the individual market is very relevant to them,” Lolli said.
Insurance carriers in the small group market in Michigan have proposed rates for 2018 that increase an average of 4 percent, according to the state summary. The small group market in Michigan covers nearly 412,000 people at small businesses across the state.
HAP’s impending departure from the individual market comes as state regulators weigh large rate increases for next year from carriers involved in the public exchange that average 27.6 percent and are based on the federal government not providing cost-sharing subsidies.
Blue Cross Blue Care of Michigan proposed a 31.7-percent increase and Blue Care Network seeks an increase of 22.6 percent for 2018 policies sold on the public exchange. Priority Health proposed a 19-percent increase, according to the state summary.
Insurers submitted two sets of rate proposals last June to state regulators, with cost-sharing subsidies and without. Rate proposals that included the subsidies had increases ranging from 8 percent to 27 percent, and increases from 19 percent to 60 percent without the subsidies.
Statewide, nearly 295,000 people buy their own health coverage on the public exchange.
HAP, owned by Henry Ford Health System, proposed an increase of 24 percent for 2018 before deciding to leave the market.
“Market volatility and uncertainties have made it difficult for insurers to effectively plan for and provide affordable individual health plans,” HAP President and CEO Terri Kline said in a statement. “We will continue to advocate for stability and affordability of coverage for consumers. HAP is prepared to re-enter the Health Insurance Marketplace in the future — if and when the individual market stabilizes.”