Rates for 2019 individual health insurance policies for Priority Health and Blue Cross Blue Shield of Michigan offer a stark contrast to prior years, as well as national averages for policy rate increases.
The Grand Rapids-based Priority Health proposes a statewide aggregate rate decrease of 2.5 percent for 2019 individual health plans. Blue Cross Blue Shield would raise rates a “relatively small” 4.2 percent for individual PPO policies, and increase rates 1.1 percent for plans sold by HMO subsidiary Blue Care Network.
Actual rates changes will vary from the proposed average based on an individual’s age and where they live.
Priority Health and Blue Cross Blue Shield proposed the rate adjustment late last week in filings to state regulators.
The proposals from the two largest health insurers in Michigan are far below a Congressional Budget Office report last month that projected an average 15-percent increase nationally in 2019 for so-called Obamacare individual health plans sold on a public health exchange, followed increases of 7 percent annually through 2028.
They also differ greatly from the rate increases implemented for 2018 after President Trump discontinued federal cost-sharing reduction payments to health insurers. The state subsequently approved increases of 31.7 percent for Blue Cross Blue Shield and 22.6 percent for Blue Care Network, and 17 percent for Priority Health.
“While the health care landscape continues to evolve at a national level, we’re looking forward to maintaining a variety of health plan options to meet the needs of all those impacted by these changes in regard to both access and affordability,” said Terry Burke, vice president of individual business for Blue Cross Blue Shield. “Our team is continually looking for ways to hold the line on plan premiums and provide members with the coverage and care they’ve come to expect from Blue Cross.”
Priority Health’s rate proposal for 2019 is for “very similar” individual plans with “very small tweaks” from 2018, said Tami Hibbitts, vice president of the individual market.
The health plan, which has about 75,000 individual policyholders statewide, attributes its rate proposal for 2019 to a better understanding of how best to manage the population that enrolls in the individual health insurance markets.
“Each year is a big learning (curve) on what people are looking for (and) how they access their care. As we learn, we try to continually improve,” Hibbitts said. “It’s all led to what we’ve been able to deliver this year.”
Hibbitts also cites the use of narrow network policies in the individual market — which generally cost 10 percent to 15 percent less than coverage using broader care networks — as keeping costs down. Narrow network policies typically are designed for coverage at one or a limited number of health systems within a market.
Priority Health sells narrow network plans that use Spectrum Health in Kent County, Bronson Healthcare in Kalamazoo County, and three health systems in southeast Michigan: Beaumont Health, St. John’s Providence Health System, and Saint Joseph Mercy Health System. About 22 percent of Priority Health’s individual policyholders are enrolled in a narrow network plan.
In announcing its rate proposal late last week, Blue Cross Blue Shield noted that the repeal of the individual mandate for 2019 “may significantly impact premiums in years ahead due to an anticipated decline of younger, healthier people enrolling.”
The CBO also stated that without the individual mandate — which required everybody to have health coverage — fewer people will enroll in health coverage, creating a risk pool that’s more costly to insure.
However, Priority Health’s Hibbitts expects the individual market will experience only “minimal impacts” from the mandate repeal.
“We don’t see a mass exodus occurring because of that mandate. They want that security, they need the coverage,” she said. “I don’t think the mandate’s going to cause a lot of people to drop off.”
Editor’s note: This story has been updated from its previous version to note that Priority Health plans an aggregate rate decrease of 2.5 percent for individual health plans. Rates also will increase 1.1 percent for Blue Care Network.