Michigan health insurance companies ordered to lower costs

Gov. Whitmer said the move is possible due to the Inflation Reduction Act.
(WALB)
Published: Aug. 18, 2022 at 6:12 PM EDT
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LANSING, Mich. (WILX) - Thursday, Governor Gretchen Whitmer sent a letter directing the Michigan Department of Insurance and Financial Services (DIFS) to require Michigan health insurance companies to reduce their previously filed health insurance rates for 2023.

Whitmer said the move was possible because the Inflation Reduction Act includes an extension of premium subsidies, in which the government covers a portion of the health insurance bill. She wrote in a release that the reduced cost for Michiganders means more who were healthy and willing to gamble that they will remain so will instead sign up for insurance, thereby reducing the overall risk for insurance companies.

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“The renewed availability of the enhanced subsidies means that many Michiganders who purchase health insurance coverage in the Marketplace can take advantage of lower premiums.” Whitmer said in the letter to DIFS. “The extension of these subsidies will mean lower risks for insurers and translate into direct savings for Michigan families. Today, I am instructing DIFS to require all insurers that offer coverage on HealthCare.gov to submit revised rates that reflect the cost savings as a result of enhanced subsidies. I am grateful for the partnership between my administration and the health insurers providing Michiganders with access to affordable coverage.

The Inflation Reduction Act of 2022, signed by President Biden earlier in the week, is aimed at lowering the cost of health care, prescription drugs, and energy. It extends subsidies for consumers who purchase coverage on the Health Insurance Marketplace. These subsidies are targeted to affect 4 out of 5 enrolled Americans to find health coverage for less than $10 per month on HealthCare.gov.

In 2022 so far, around 260,000 Michiganders have used the extended tax subsidies, saving an average of $800 a year.

“Pursuant to the Governor’s directive, DIFS is issuing guidance requiring insurers to file health insurance rate revisions, reflecting appropriate actuarially-justified reductions,” said DIFS Director Anita Fox. “Extending the American Rescue Plan subsidies until 2025 means more people, including middle income families, will be able to afford health insurance.”

The full letter is included below.

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