Opinion | Reports of Obamacare’s demise are greatly exaggerated, especially in Michigan


Marianne Udow-Phillips is Executive Director for the Center for Health Research and Transformation in Ann Arbor; Megan Foster Friedman is a senior analyst for the Center for Health Research and Transformation in Ann Arbor; Maggi Randolph is a senior analyst for the Center for Health Research and Transformation in Ann Arbor

The Affordable Care Act (ACA) is alive and well in Michigan. Despite the well-publicized turmoil in the market, Michigan citizens who buy their coverage in the individual market will have more choices of insurance carriers in 2019 than they did in 2018, and the cost of coverage is proposed to increase modestly -- and in some cases is going down.

Michigan has always approached the individual market elements of the ACA in a pragmatic and non-ideological way. The State, health plans, providers, businesses and consumer groups have done their best to make the ACA work on behalf of consumers, and it shows. In 2019, premiums are proposed to increase an average of only 1.4%, a new market entrant is coming to Michigan (Oscar), and health plans have been financially stable. Other states could learn much from Michigan if their goal is to help citizens get access to health care, and if they want to use the ACA as it was intended.

Since January 20, 2017, the future of the ACA has been in doubt. There have been numerous attempts to repeal the ACA; the tax penalty for not having insurance coverage has been ended; the Department of Health and Human Services stopped paying health plans for the cost-sharing reductions the plans are required to make for individuals with incomes below 250% of poverty; support for navigators to help individuals enroll in the ACA has all but ended; risk-adjustment payments have been put in doubt; and, short term health plans that are non-compliant with the ACA rules and were permitted under the Obama administration to last no longer than 3 months have now been proposed to be extended to 3 years. All of these changes have created turmoil in the market, and have been seen as attempts to weaken the ACA. Despite these real challenges, the ACA Marketplace has been remarkably resilient and Michigan’s experience with the Marketplace has been particularly robust.

From day one, the ACA in Michigan operated as it was envisioned by the framers: a vibrant market that provided consumers with options, covered a breadth of services, and enabled consumers to make informed choices about tradeoffs between premiums, cost-sharing levels, and networks of hospitals and doctors. In 2014, 13 issuers offered 73 health plans in Michigan. Every region in the state had a choice of health products and most regions had a choice of carriers.  

The health insurance turmoil of 2017 did affect the Michigan market. Michigan health plans raised their individual market premiums an average of 26.7% for the 2018 plan year. Approximately 15% of that increase was due to the non-payment of cost-sharing reductions by the federal government, and 5% was due to uncertainty about the regulatory climate.  

But, even with these changes, the ACA has remained strong in Michigan. The ACA’s design, combined with unique market factors in the state, has been essential to its relative success.

The ACA expanded coverage through a combination of carrots and sticks. The individual mandate was meant to encourage people to get coverage by applying a tax penalty to individuals who did not have coverage and were not eligible for an exemption. In 2015, there were 189,160 Michigan residents who paid that tax penalty, the most recent year of data available. The tax penalty was ended by Congress as part of the tax changes that will go into effect in 2019. Many analysts were concerned that the end of the tax penalty would mean that 2019 premiums would increase dramatically. But, the reality is that the tax penalty was never as stringent as the health plans wanted and the carrots included in the ACA were probably a more important reason people were getting coverage.  

The ACA’s tax credits have made insurance affordable for many who could not afford it previously. In Michigan, 86% of those who got coverage in the Marketplace in 2018 got it with a tax credit. Those with tax credits were sheltered from the 27.6% increase in premiums; those without tax credits had to pay that full increase to maintain coverage. As a result, many who did not get a tax credit did not get coverage in 2018. National data tells us that individual market membership dropped from 16.4 million in the first quarter of 2017 to 14.4 million in the first quarter of 2018. While the number of individuals buying coverage on the Marketplace who received tax credits actually increased by over 500,000, the decrease was driven by a drop in enrollment among those that did not receive tax credits - 209,000 unsubsidized Marketplace consumers, and 2.3 million who purchased insurance directly from insurers, off the Marketplace.

Michigan’s local environment has also been important to the success of the ACA’s Marketplace.   The health plans in Michigan with the largest share of the individual market have deep Michigan roots. Blue Care Network, Priority Health, and Blue Cross Blue Shield of Michigan combined cover 84% of the members in the individual market in 2018. Total Health and Physician’s Health Plan are the next largest insurers. None of the big, national commercial health plans offered coverage in the 2018 individual Michigan Marketplace.

Prior to the ACA, BCBSM had a long history providing coverage in the individual market as the insurer of last resort. And, the other health plans offering coverage in the individual Marketplace had substantial experience with Michigan’s Medicaid program, successfully serving a complex population under risk-based contracts with the state. Many of the plans in Michigan’s Marketplace understood the market and all were committed to the state and their local communities.

Importantly, Governor Snyder and his leadership never made the ACA a political issue in Michigan. Rather, the Governor approached the ACA from a pragmatic perspective – trying to make the market work for Michigan citizens. As a result, the Department of Health and Human Services and the Department of Insurance and Financial Services partnered with health plans, consumer groups, providers and others to make the Marketplace work as best as it could.

Michigan’s Marketplace enrollment dropped in 2018 but not by nearly as much as many predicted. In 2018, nearly 294,000 selected coverage through the Marketplace in Michigan, 9% less than in 2017. And at this point in time it appears that in 2019 Michigan citizens will have good choices of coverage with minimal premium increases when they shop for coverage this fall.

In today’s often hyper-partisan and politicized environment, it is important to note that there are good examples of government working for the people of our state. The ACA Marketplace is one such example of how policymakers rose above turmoil and chaos and came together to preserve relative affordability and access to health coverage.  The ACA is indeed alive and serving the people of Michigan.

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Kevin Grand
Tue, 09/11/2018 - 7:48am

Mses. Phillips, Friedman and Randolph have glossed over multiple glaring lies (or the "stupidity of the American Voter as Obamacare Architect Johnathan Gruber put it...take your pick) that was told to Americans in order to sell them the snake oil also known as Obamacare.

Does anyone remember "If you like your plan, you can keep it"?

How about "If you like your health care professionals, you can keep them"?

Or, this doozey; "American Families will see $2,500/year in savings after the ACA is passed"?

Has anyone experienced that?

Obamacare is nothing less than a transfer of wealth taking money from responsible Americans who go out and pay health care for themselves and their families and gives it to those who do not want to pay.

THAT is why everyone premiums and deductibles have skyrocketed since Obamacare was jammed down our throats.

It is beyond absurd to claim that Obamacare is an example of the government working for the people.

If Obamacare really worked as well as the authors of this piece have claimed, why require people to sign up for and pay into it?

That should tell you everything that you need to know about their model right there!

Tue, 09/11/2018 - 10:33am

You're right. If it was the government working for the people, we would have gone to a universal system, instead of the garbage free market adjacent system that the Republicans championed right up until the ACA was proposed. You also conveniently ignore the undermining of the ACA by GOP politicians at the state and national level, which caused the instability leading to the price hikes.

Also, it's hilarious that you're complaining about wealth transfer in light of Trump's tax scan; you're fine with the redistribution of wealth, as long as it isn't going to help the poor

Kevin Grand
Tue, 09/11/2018 - 12:33pm

Universal health care?

So, instead of the system that we have today, which was the best system on the planet until the democrats got their hooks into it (I don't recall reading about people making a run for Cuba, Venezuela or North Korea for their health care), you want the system like that currently in place in Europe where health care is rationed, patients are waiting for hours in the backs of ambulances to get into Emergency Rooms, patients need to schedule months in advance to see health care professionals and if your treatment is deemed "too expensive" according to the governments own bureaucrats (not doctors..bureaucrats), well just make sure that those last wills and testaments are filled out.

And even though this is getting off-topic, no I don't have any wealth envy issues like you obviously have. Unlike yourself and the authors of this piece, I subscribe to the philosophy that people should be allowed to keep what they earn. America grew and prospered for about a century and a half before the progressives gave us the income tax which we were told then would only apply to "the rich".

The outcome of that lie should be a good indication to everyone here what will happen in America if Obamacare is allowed to exist. Allowing the government greater control into the lives of the individual inevitably leads to failure.

Tue, 09/11/2018 - 6:22pm

Your first paragraph is big on GOP talking points and scare tactics, but low on facts (and for what it's worth, Cuba has a pretty good health care system).

You can stuff your ad hominem about wealth envy; I make plenty. I just happen to have the humanity to recognize the immorality of dooming people to financial insolvency because an illness, and the common sense to realize that our present situation is unsustainable (and the state of healthcare in America before the ACA doubly so).

Finally, I would invite you learn your history. Learn what life was like in America during the Gilded Age. Learn why men fought and died to unionize. Learn why we have a minimum wage (that I'm sure you deride). You might want to be a peasant in the feudalitic corprotocracy that is the end result of your ideology, but I don't

Kevin Grand
Tue, 09/11/2018 - 10:18pm

When you cannot attack the facts, attack the messenger...got.it. The lies I've cited above were all make by Pres. B.O. himself (multiple times) and his staff. Unless you believe what you see on South Park, he's not on the same side as the GOP.

Regarding you second point: I don't know where you got the idea that you have ANY right to the labor of others? If you feel what YOU earn is too much, I wont stop you from opening up your own wallet and checkbook so that you can assuage your obviously guilty conscience by giving away you own money. Come to think of it, I can't see why anyone else would either?

As for what I earn, that's up for me to decide on how to best spend my own money. Certainly not you and absolutely not politicians wanting to buy the votes of people who won't pay their own bills! There are too many multi-millionares on the democrat-side of the aisle in Congress who dont share your spread the wealth mentality. How many houses does Bernie own again? Two? Three?

And if you want to cite histody and unions, go look up the latest with the UAW and how they were bought off by the car companies they were supposed to be protecting the workers they claim to represent in the training center scandal. How many in the union leadership were under investigation or indicted?

I'm educated, can think for (and represent) myself and have skills that are in demand. So while I appreciate your concern, you needn't worry about where my next paycheck is coming from.

OABTW, there are many others who can do exactly the same.

Aldon Maleckas
Tue, 09/11/2018 - 9:05am

Health insurance in Michigan should be robust. My premiums went up from $85 to $165 after Obamacare.

Tue, 09/11/2018 - 11:25am

The insurance companies have been using the ACA to rationalize premium increases for the past several years. Also, previous to the ACA, many employer-sponsored health care plans were limited but cheap and had high co-pays or deductibles. The higher common standards required do cost more, but you can always shop the market for a low-cost, no frills plan. From the Charlotte Observer: "Between 2000 and 2010, average family premiums for employer coverage grew 8 percent per year – a perpetual burden on Americans’ budgets. From 2010 to 2016, that same average has grown at a slower 5 percent a year. Hundreds of thousands of people were afraid to change jobs: It’s a phenomenon called “job lock” – people being afraid to leave their corporate jobs and go out on their own because doing so meant walking away from affordable premiums. For some, the risk was even greater; if you had a pre-existing condition, insurance companies could refuse to sell you coverage. No longer. Women paid more than men: Before Obamacare, women buying insurance on the individual market were often charged more than men. The practice was known as “gender rating.” The ACA made that illegal. There were more hospital mistakes: After Obamacare offered incentives for hospitals to avoid readmissions and harm to patients, hospital readmissions for Medicare beneficiaries dropped 8 percent. That translates into 565,000 fewer readmissions, according the Department of Health and Human Services. Obamacare has brought other benefits for Americans, such as lowering prescription drug costs for some, and putting an end to annual and lifetime limits on coverage. Is the ACA perfect? Far from it. But as Republicans float various ways to replace it, they’re finding that Americans’ memories are getting clearer. Obamacare is not a failure. It’s an improvement."