A record number of Michigan residents signed up for health insurance through the Affordable Care Act marketplace for 2023.
On Thursday, Jan. 26, state officials announced an enrollment total of 322,273 in Michigan. This marked a 7% increase from last year. Sign-ups have climbed for three consecutive years after a downward trend from 2017 to 2021.
This year’s increase reflected national numbers. A record 6.3 million Americans enrolled in coverage through the federal program. Many of them are seeing reduced prices thanks to the Inflation Reduction Act.
Passed by Congress in 2022, the act capped copays for insulin at $35 per month for Medicare recipients, made covered vaccines available at no cost for Medicare Part D recipients, and reduced premiums for millions of families insured through the Affordable Care Act marketplace.
“Hundreds of thousands of Michiganders have selected a high-quality, affordable marketplace health insurance plan and this is a major win for the health of this state,” said Anita Fox, director of the Michigan Department of Insurance and Financial Services.
“We know having comprehensive health insurance leads to healthier families and a healthier, more productive Michigan because it provides access to care for illnesses and injuries, but also for preventative care like childhood immunizations and cancer screens.”
More families were eligible for subsidies this year after the federal government fixed a previous policy nicknamed the “family glitch.” In the past, eligibility for financial assistance through the marketplace was based on whether an individual had access to affordable employer-sponsored insurance. But whether the plan was affordable was only based on coverage for the employees, not their families.
The recent rule change bases the affordability determination on the cost of coverage for the employee plus family members. Eligible families would be those who pay 9.12% or more of their household income for the employer-sponsored plan.
“It means more than 55,000 additional Michiganders now have insurance and get preventative care and childhood vaccines with no out-of-pocket costs,” said Joseph Palm, regional director for the U.S. Department of Health and Human Services.
In 2022, the U.S. uninsured rate was about 8%, which Fox called an all-time low. The latest data she saw for Michigan’s rate was about 6%.
The deadline to enroll for coverage through the marketplace has passed, but some residents will qualify for a special enrollment period if they have experienced a qualifying life event, such as a birth, job loss, or divorce.
Fox said she didn’t have specific data on what may have contributed to the increase, but it’s likely a combination of factors including trends in employer-sponsored coverage, shifts in employment, subsidy eligibility, and moves to get off Medicaid while still securing comprehensive plans.
“At our department we saw a huge influx of people wanting to be insurance agents during the pandemic, giving them more control over their income perhaps, a little more self-employment, and those people may lose employer-sponsored health coverage and move onto a plan,” she said.
Over the last two decades there has been a decline in businesses offering healthcare benefits, according to annual survey data from the Kaiser Family Foundation. In 2022, an estimated 51% of businesses of all sizes offered health insurance to at least some of its workers. That number was 59% in 2021, and 66% in 1999.
Nearly all large firms – those with 200 or more workers – offer health benefits to their workers. Smaller firms are less likely to provide such benefits due to budget constraints.
An estimated 67% of businesses with 10 to 199 workers offered health benefits last year, compared to 72% in 2021 and 81% in 1999. Similarly, firms with three to nine workers dipped from 49% in 2021 to 39% in 2022, according to the Kaiser foundation survey results.
Over the last decade, the trend for many businesses has been to reduce benefits or shift more cost sharing on the employee, via higher deductibles and copays, to counter rising healthcare costs, explained Bret Jackson, president and CEO of the Economic Alliance for Michigan, a non-profit comprised of businesses and unions working to grow Michigan’s economy.
But a tighter labor market has forced some more competitive industries to pivot and expand available benefits to attract and retain workers.
“It’s not that they’re not concerned about costs,” Jackson said. “You can’t find people to work in grocery stores, in gas stations. I think generally the trend is going to be to do things to incentivize people to work, not dis-incentivize people like removing benefits.”
The Kaiser foundation 2022 survey of more than 2,100 employers, published in the journal Health Affairs in December, indicated little change in annual family premiums for employer-sponsored health insurance in 2022 compared to the prior year. The average annual increase in family premiums was 1%, the lowest year-to-year increase in decades.
But with a recent spike in inflation, larger increases in annual premiums are likely imminent for 2023, noted Kaiser foundation President and CEO Drew Altman in a press release.
For Jackson, that’s already a reality at the Economic Alliance for Michigan. The company’s benefit plan for 2023 is expected to cost 13.8% more than in 2022.
“Small businesses are just getting killed by healthcare costs,” Jackson said. “We need Congress, we need our state legislature, to really attack what’s driving health care costs and that’s hospitals, it’s drugs, it’s (pharmacy benefit managers), it’s private equity.”
Since 2012, inflation has increased 25%, while wages have increased roughly 38% and the average premium for family healthcare coverage has increased about 43%, according to the Kaiser foundation survey.
For more information on obtaining health insurance, visit Michigan.gov/Healthinsurance, or call 877-999-6442 between 8 a.m. and 5 p.m. weekdays.
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