HAP leaves Michigan exchange, feds cut outreach aid

Jonathan Oosting
Detroit News Lansing Bureau

A major health insurer is leaving Michigan’s individual marketplace, ending its policies offered here under the Affordable Care Act as the federal government slashes funding for enrollment and outreach groups.

Health Alliance Plan said Friday it has withdrawn individual plans it expected to sell on the Michigan exchange. The decision will affect about 9,100 customers, according to the Detroit-based insurer, which previously asked the state to approve an average 24 percent rate increase for 2018.

Almost 295,000 Michiganians bought individual policies last year, according to the state

HAP cited a variety of motivations for its withdrawal. They included uncertainties over rate premium stabilization programs, along with questions over the individual insurance mandate and cost-sharing insurer payments President Donald Trump’s administration has threatened to end amid continued debate over repealing and replacing the federal health law.

“Market volatility and uncertainties have made it difficult for insurers to effectively plan for and provide affordable individual health plans,” HAP President and CEO Terri Kline said in a statement.

“We believe our decision is in the best interest of all of our members. As a nonprofit health plan with the mission of enhancing the health and well-being of the lives we touch, we need to be responsible with our members’ health care dollars. We owe it to them to offer products that are sustainable and that create value for them.”

The HAP announcement came less than two months before the open enrollment period begins Nov. 1. It is the second insurer to withdraw from the state marketplace for 2018, when overall premiums are expected to rise nearly 28 percent. Alliance Health and Life Insurance Company did not file any on-exchange plans with the state.

HAP also lost $2.8 million in the individual market in 2016, according to a report by Minneapolis-based health analyst Allan Baumgarten.

The reduced marketplace offerings signal continued turmoil for the federal health care law, which has increased insured rates nationally but not controlled premium increases as anticipated.

Michigan’s largest grassroots group helping enroll individuals in plans under the Affordable Care Act learned Thursday its federal funding would be slashed 90 percent for the current grant year, which began this month.

The Centers for Medicare and Medicaid services informed so-called health insurance “navigator” groups of the federal cuts Thursday, fueling continued accusations that Trump’s administration is trying to undermine a law the Republican-led Congress has tried but failed to repeal and replace.

Enroll Michigan, which also hands down funding to 28 smaller groups, said its budget was cut 90 percent from $1.2 million to $129,899 for the 2018 grant year. Funding for the ACCESS nonprofit was cut 36 percent from $555,000 to about $352,000.

“It means a greatly reduced operation,” said Dizzy Warren, executive director of Enroll Michigan. “We just won’t have the ability to reach as many consumers, and we’re not going to be as accessible to those seeking information.”

The Department of Health and Human Services warned of the cuts late last month, telling reporters Affordable Care Act advertising and other outreach efforts were showing “diminishing returns.” Officials reportedly said navigators who did not hit enrollment targets would be “held accountable.”

Warren said her group last year helped 1,694 consumers enroll in a qualified health plan through the federal marketplace. But it was a small fraction of the 49,196 consumers it assisted overall, according to group statistics. Navigators also helped enroll qualifying individuals in Medicaid and small business plans, in addition to education and outreach efforts.

Enroll Michigan worked with 28 smaller navigator organizations in all 83 counties year-round in 2017, Warren said. Because of the new funding cuts, the group expects to work with nine navigator organizations for only part of the year, October through December.

“These cuts will be absolutely devastating for Michiganders who are looking for assistance in enrolling in health insurance,” U.S. Rep. Sandy Levin, D-Royal Oak, said in a statement. “This is just the latest example of the Trump administration attempting to sabotage the ACA – this time at the particular expense of the health of Michiganders.”

Levin last week wrote a letter to CMS Administrator Seema Verma asking the agency to justify its new methodology for determining funding for the navigator groups, which provide in-person assistance, phone counseling and other services.

The federal government shortened this year’s open enrollment period, which starts Nov. 1, from three months to 45 days as part of a rule CMS said would “help stabilize the individual and small group markets and affirm the traditional role of state regulators.”

Warren said the shortened enrollment window was already going to pose a challenge for her group and others working to help enroll consumers.

“I don’t know what the Trump administration’s intents are, but navigators since 2013 have been providing a very important service to consumers in an environment where there’s lots of misinformation,” she said. “I do know the biggest losers in all these decisions will be consumers in the state of Michigan.”