Policy analysts and health care stakeholders offer a variety of reasons for the trend \u2014 from increasing costs for drugs and hospital care to acts of Congress:\u00a0<\/p>\n
Providers leaving the state<\/p>\n
The number of Michigan health insurance providers offering plans that individuals can purchase has dropped steeply.\u00a0\u00a0\u00a0<\/p>\n
The state had 41 health insurers offering individual plans in 2011, according to the Government Accountability Office<\/a>. That number fell to 12 by 2022.<\/p>\n That year, Michigan\u2019s top three health insurers \u2014 Blue Cross Blue Shield, Priority Health and Meridian\u00a0 \u2014 held 88% of the individual group market share, according to the congressional budgeting office. Large insurers control an even bigger share of employer-provided plans.\u00a0<\/p>\n While state insurance regulators say the state has historically had a \u201crobust market,\u201d providers are continuing to drop coverage.<\/p>\n \u201cFor plan year 2026, Michigan will have 10 issuers in the individual market in 2026, down from 12 in 2025,\u201d Chelsea Lewis, spokesperson for the Michigan Department of Insurance and Financial Services, told Bridge Michigan in an email. \u201cOn the Marketplace, Healthcare.gov, Michigan will have 7 issuers, down from 10 in 2025.\u201d<\/p>\n Among the large insurers to remove plans from the ACA exchange next year<\/a> is Health Alliance Plan (HAP). The company\u2019s president, Margaret Anderson, cited capacity issues among other reasons.<\/p>\n \u201cWe would not have the financial resources to keep all of our other lines of business afloat had we decided to stay in the marketplace,\u201d Anderson told Bridge, projecting \u201csignificant losses\u201d for next year based on \u201cuncertainties and the increasing cost of marketplace claims, both on a pharmacy and a medical perspective.\u201d<\/p>\n HAP has about 490,000 members today, offering individual plans off-exchange along with commercial and Medicare Advantage coverage.<\/p>\n Congressional analysts say reducing the number of available plans causes premiums to rise, which in turn, \u201cmay result in decreased consumer access to affordable health insurance.\u201d<\/p>\n \u201cAlthough some studies find that concentration can result in reduced costs for issuers \u2026 and lower prices paid by issuers to providers for medical care, these savings may not be passed on to consumers as lower premiums,\u201d GAO health care director John Dicken wrote in a 2024 analysis of national private health insurances.\u00a0<\/a><\/p>\n Expiring tax credits<\/p>\n One of the biggest reasons premiums are going up is that insurers are\u00a0 preparing for the end of an enhanced premium tax credit program for health insurance plans bought through HealthCare.gov.<\/p>\n The future of these tax credits lies at the heart of the government shutdown<\/a>, as lawmakers debate extending the subsidies further. Democrats want assurances that the credits will be extended into the new year and that Medicaid cuts previously approved by President Donald Trump will be reversed. Republicans want to end the shutdown first, holding off on any health care policy negotiation until after a funding bill is approved.<\/p>\n \u201cCongress\u2019s failure to extend the enhanced advanced premium tax credits also contributed to higher rates, as fewer young and\/or healthy people are expected to sign up for insurance, which adversely impacts the risk pool,\u201d Lewis said.<\/p>\n Policy analysts estimate 484,000 state residents use the health care subsidy and its expiration may drive people to drop coverage.<\/p>\n \u201cWithout the renewal, families will see their monthly premiums skyrocket by more than $400 a month, with some people facing much higher increases,\u201d Monique Stanton, president and CEO of the Michigan League for Public Policy, said during a news conference Tuesday supporting the tax credits.<\/p>\n Stanton said without coverage, patients are more likely to seek medical care at emergency departments, which would raise costs for the overall health care system.<\/p>\n Rising inflation<\/p>\n \u201cMaintaining a facility or purchasing or leasing a space has often gone up in price,\u201d Phillip Bergquist, CEO of the Michigan Primary Care Association, which represents a network of community health clinics across the state, said at the news conference.<\/p>\n The last five years have seen a steep increase in the price of supplies and facility maintenance, Bergquist said, and the \u201cwage competition\u201d for licensed providers and other workers is also on the rise.<\/p>\n \u201cThe biggest cost in providing health care is the people who provide the care,\u201d he said.<\/p>\n Bergquist estimates over 22,000 community health center patients will lose coverage statewide as a result of the increase in insurance rates, representing an $18 million reimbursement loss for the clinics providing care.<\/p>\n Hospital costs<\/p>\n Physicians like Dr. Todd Otten of Dimondale partially blame the \u201cout of control\u201d costs on high administrative costs, reflecting an industry where the growth of health care managers has significantly outpaced jobs for doctors<\/a>.<\/p>\n \u201cThere\u2019s a complete disconnect with where the money is going and the outcomes,\u201d Otten said at Tuesday\u2019s public policy news conference.<\/p>\n Insurance executives have blamed ballooning hospital costs<\/a> for driving premiums up.\u00a0<\/p>\n According to the Michigan Health Purchasers Coalition, a nonprofit organization to lower costs to employer-sponsored health care plans, 47 cents on the dollar of commercial health plan premiums is spent on hospital services in Michigan.<\/a><\/p>\n Bret Jackson, who manages the coalition, is president and CEO of a group of employers and labor union health care advocates known as the Economic Alliance of Michigan. He blames hospital consolidation as the \u201cnumber one reason\u201d for rising prices.<\/p>\n \u201cThis happens everywhere around the country,\u201d Jackson said. \u201cBig, corporate health systems take over and buy more hospitals and buy more doctors and buy more clinics \u2026 the prices just inevitably go up because they now have more market power, and they can now demand and get people to pay higher prices for services.\u201d\u00a0<\/p>\n Michigan\u2019s hospital leaders acknowledge the reality of mergers and acquisitions in the state, but argue that some smaller communities benefit.<\/p>\n \u201cThe cost of electronic medical record infrastructure is extraordinary today. The cost of medical liability insurance coverage, the cost of physician practice subsidization,\u201d Brian Peters, CEO of the Michigan Health & Hospital Association, told Bridge. \u201cYou\u2019re better able to bear that underlying cost if you\u2019re part of a larger system that has more capital resources.<\/p>\n Peters, who says he\u2019s been lobbying the state\u2019s congressional delegates to extend the enhanced premium tax credits subsidy, worries that \u201cuncompensated care\u201d will force hospitals to lose money.<\/p>\n He said the rise of premiums can be owed to a couple factors outside of congressional gridlock, including the \u201cexplosive growth\u201d in drug costs and health care supplies, made worse by federal tariff policy.<\/p>\n Drug prices<\/p>\n Many point to increased post-COVID medical check-ups, increased use of innovative gene therapies and GLP-1 weight loss drugs <\/a>and pharmaceutical prices outpacing inflation as contributing factors to rising costs.<\/p>\n \u201cAs we\u2019re evolving these new therapies and these new advancements, we\u2019re seeing these cost pressures coming in,\u201d HAP\u2019s Anderson said. \u201cPart of insurance is pricing for the risk.\u201d<\/p>\n Dr. Mark Fendrick, who directs the Center for Value-Based Insurance Design at the University of Michigan<\/a>, said shifting pharmaceutical prices are impacting decisions during Medicare open enrollment, which ends Dec. 7.<\/p>\n \u201cPeople who have long loved traditional Medicare are moving to Medicare Advantage because they don\u2019t like the fact that their premiums for their drug coverage have gone up,\u201d he said.\u00a0<\/p>\n Despite consumer sentiment being overly focused on premium price, Fendrick says the monthly expenditure only represents a component of the full financial picture consumers must consider when selecting a plan from Medicare, the individual market or any other private insurer.\u00a0<\/p>\n \u201cAmericans don\u2019t care about health care costs. They care about what it costs them,\u201d Fendrick said. \u201cPremiums are only part of the story.\u201d<\/p>\n Fendrick advises consumers to shop around their plans to check out deductibles and copayments, rather than defaulting on renewing their current coverage, saying they should closely analyze their out-of-pocket exposure before making a decision.<\/p>\n Editor\u2019s note: This story was updated on Thursday, Nov. 6, 2025, to correct the date by which people must enroll in ACA marketplace plans so that coverage can begin in January. <\/p>\n \n\tRelated\n<\/p>\n Thank you to our Michigan Health Watch Sponsors<\/p>\n Michigan Health Watch is made possible by generous financial support from our sponsors.\u00a0Please visit the\u00a0About<\/a>\u00a0page for more information and to subscribe to Michigan Health Watch. Interested in becoming a sponsor?\u00a0Contact Emma Carr<\/a>.<\/p>\n Republish This Story<\/p>\n
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