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Michigan’s health care landscape is being reshaped by the renewed strength of health maintenance organizations and the growing role of government health insurance programs, according to report released Wednesday.

The number of Michigan residents with health insurance grew from 8.56 million to 9.3 million between 2010 and 2016 — an increase of 740,000, according to the 2018 Michigan Health Market Review by Minneapolis-based analyst Allan Baumgarten. It coincides with the Affordable Care Act of 2010.

The number of insured residents grew by 321,000 between 2014 and 2016, due in large part to Healthy Michigan, the state’s expanded Medicaid plan for low-income and working poor residents. Nearly 690,000 Michigan residents are enrolled in Healthy Michigan, according to state Department of Health and Human Services.

Medicaid accounts for more than half of all HMO enrollees in the state, according to Baumgarten’s report. Enrollment in HMOs grew from 2.7 million residents in 2013 to 3.445 million in 2017, an increase of 28 percent.

“There’s very little left of what you would call traditional insurance plans,” Baumgarten said Wednesday.

Michigan has a long history of provider-owned HMOs, such as Health Alliance Plan, owned by Henry Ford Health System. But the trend was boosted by the state’s Medicaid expansion in April 2014 because Michigan — unlike many other states — contracts only with HMOs to provide Medicaid health services, Baumgarten said.

About 36 percent of Michigan’s population is covered by public health insurance, with 75 percent of all inpatient hospital days paid for by Medicaid, the Children’s Health Insurance Program or Medicare, according to the report.

Most individual health insurance enrollees in Michigan are covered by HMOs, Baumgarten said. But two-fifths of all HMO enrollees in Michigan belong either to Blue Care Network or Priority Health. That’s because both insurers have networks that cover the entire lower peninsula — making them attractive to large employers who have locations throughout the state.

Michigan’s HMOs earned combined net income of $1.7 billion between 2013 and 2017, according to the report. But Blue Care Network and Priority Health account for 61 percent of that net revenue. This means other HMOs aren’t necessarily faring as well financially, said Dominick Pallone, executive director at the Michigan Association of Health Plans.

“The HMOs that are doing Medicaid for the state of Michigan were at a 1.2 percent profit margin (in 2017),” Pallone said of the group’s members, who insure more than 3 million Michigan residents. “Some are in the negative, and some are in the positive, so it really does depend on the plan.

“The challenge is making sure HMOs can price products in a way that employers will want to purchase.”

KBouffard@detroitnews.com

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