Michigan Medicaid HMOs and individual health insurance plans tripled their operating margins in 2014 as a result of the federal Affordable Care Act, according to a report released Wednesday.
Research by Allan Baumgarten, publisher of Michigan Health Market Review, found that health maintenance organizations providing coverage under Michigan’s expanded Medicaid program saw improved enrollment, underwriting margins and operating income in 2014 as more than 600,000 residents enrolled.
Enrollment in Healthy Michigan, the expanded Medicaid program, surpassed all estimates and ended a five-year streak of consecutive losses for the state’s Medicaid HMOs. It increased by 21 percent in 2014 and another 7 percent in the first quarter of 2015, according to the report.
“We were hoping that the trend would move in this direction because we had a trend of margins getting less each consecutive year,” said Rick Murdock, executive director of the Michigan Association of Health Plans. “It’s literally twice what we expected was out there.”
The findings are consistent with an analysis from the University of Michigan’s Center for Healthcare Research and Transformation, which showed the percentage of uninsured Michigan adults dropped from 14 percent in 2012 to 7 percent in 2014.
According to Baumgarten, enrollment in individual plans offered by Michigan HMOs and other insurers increased from 226,000 at the end of 2013 to about 395,000 at the end of 2014, and to 483,000 after the first three months of 2015. Blue Care Network added 163,000 in the 15-month period. Michigan Medicaid HMOs quadrupled operating income from $41.2 million in 2013 to $163.1 million in 2014.
The Kaiser Family Foundation found proposed rate increases for 2016 for individual plans in the Detroit region are mostly modest, Baumgarten noted. The pre-subsidy premium of the lowest-cost Silver plan on the exchange will decrease from $219 to $210, though some insurers have proposed double-digit increases for some plans. Blue Cross Blue Shield of Michigan proposed increases ranging from 10.3 percent to 12.4 percent for some plans.
“In general, it is good for consumers because the last two years the individual insurance market has been transformed,” Baumgarten said. “There’s much more competition, there’s access to subsidies, and prices have grown relatively slowly compared with previous years.”