State regulators have approved a significant increase in health insurance rates for 2022, reflecting recent paint-up demand for medical procedures and services that people have stopped due to the previous Covid-19 increase.
The increase, introduced by the Michigan Department of Insurance and Financial Services, will take effect Jan. 1 and will average 7.1% for small group plans – businesses and organizations with 50 or fewer employees – and 4.7% for individual market insurance policies purchased by Healthcare. .gov website. The new rates will affect an estimated 742,000 people.
The rate increase is much larger than what regulators approved last year because insurance companies saw fewer claims during the epidemic because people delayed alternative procedures and paid less for doctor visits. That earlier growth, 1.4% for small groups and 1.1% for individual policies, was unusually low by historical standards.
Example of health care insurance. (Special for Paul Lachin / Free Press)
State regulators have approved a significant increase in health insurance rates for 2022, reflecting recent paint-up demand for medical procedures and services that people have stopped due to the previous Covid-19 increase.
The increase, introduced by the Michigan Department of Insurance and Financial Services, will take effect Jan. 1 and will average 7.1% for small group plans – businesses and organizations with 50 or fewer employees – and 4.7% for individual market insurance policies purchased by Healthcare. .gov website. The new rates will affect an estimated 742,000 people.
The rate increase is much larger than what regulators approved last year because insurance companies saw fewer claims during the epidemic because people delayed alternative procedures and paid less for doctor visits. That earlier growth, 1.4% for small groups and 1.1% for individual policies, was unusually low by historical standards.
Mike Embry, president of Southfield-based insurance agency Comprehensive Benefits, said his small group of clients with PPO plans are expected to grow by an average of 6% to 7% for 2022, and those with HMO plans have grown by 8% to 11%.
“Last year, because of Kovid, the rates were relatively flat,” Embry said. “I think a lot of people were avoiding going to the doctor, completing the procedure.”
The good news is that rates for many dental and vision plans remain flat or will decline next year, Embry said. The credit for that situation goes to people who go back to the dentist or optometrist longer than the doctor.
“On the dental and visual side, we’ve actually seen rate cuts over the last two years,” he said.
Michigan’s Blue Cross Blue Shield, the biggest player in the employer-sponsored insurance market, is raising rates by 7.9% for its small group plans in 2022 and 6.9% for its Blue Care Network small group plans.
A Blue Cross representative previously noted that between 2015 and 2021, its small group rates increased an average of 1.2% annually.
The open registration period for individual policies on the Healthcare.gov website starts on November 1 and runs until January 15, although people are required to register by December 15 for coverage starting January 1. Michigan can choose individual plans from 10 different insurance companies. . While Total Healthcare USA is opting out of individual coverage, United Healthcare and US Health and Life are launching coverage.
The increase in rates on individual policies will not directly affect everyone who buys for the plan on Healthcare.gov as the increase in the price of stickers on the policy also increases the Affordable Care Act subsidy for income-eligible individuals.
President Joe Biden’s Covid-19 rescue plan signed into law in March, temporarily raising eligibility for those grants for high-income people for 2021 and 2022, and also lowering premiums for those already eligible.
A survey by the Kaiser Family Foundation found that Michigan has the third-cheapest “benchmark plan” premium for personal policies this year, averaging $ 347 per month for the second-lowest-priced silver plan for 40-year-olds. The US average was 2 452.