Michigan’s Health Insurance Marketplace Will Open for Business Oct. 1 — Executive Summary

Executive Summary | Full report in PDF

Michigan’s federally operated exchange, the new regulated, competitive, consumer-friendly Health Insurance Marketplace will open for business on Oct. 1, 2013. It is designed to help individuals without affordable employer coverage and small businesses compare options and purchase quality healthcare coverage. The Health Insurance Marketplace website and toll-free number (800-318-2596) are currently available to provide general information. Michigan-specific information will be available starting Oct. 1, 2013, when open enrollment begins. Healthcare coverage options available through the Marketplace together with the expansion of Medicaid eligibility will greatly reduce the number of uninsured in Michigan. Unprecedented healthcare coverage opportunities as well as economic and health security will become available to Michigan’s uninsured residents.

Exchanges Required in Every State

The Affordable Care Act requires every state to have an operational health insurance exchange by Jan. 1, 2014, with open enrollment beginning in October. States have the option of designing and operating their own exchanges (“state-operated exchange”), or deferring to the federal government to design and operate all (“federally facilitated exchange”), or most (“partnership exchange”) functions of the exchange.

Michigan’s Decisions

Gov. Rick Snyder strongly supported the creation of a state-operated marketplace and urged lawmakers to pass enabling legislation. State lawmakers, however, refused and turned down federal funds for research and planning ($9.8 million). When the governor then proposed a federal-state partnership exchange, the Legislature refused to accept the federal dollars ($30.7 million) for implementation and consumer assistance. In total, the state has declined to accept more than $40 million in federal funds. Michigan has totally deferred to the federal government to develop and operate its Marketplace. Because a state is not precluded from establishing a state-operated exchange after 2014, Michigan policymakers could develop a plan to transition to a state-operated marketplace in the future.

Qualified Health Plans

The Marketplace will provide a one-stop location for reviewing and shopping for health plans, and a level playing field where health plans will compete based on quality and price. Health plans sold in the Marketplace must be qualified and include a minimum set of benefits as specified in the law. Applications, received from 14 companies, seeking to be qualified to sell products in the Marketplace, are under review by the state and federal governments. Consumers Mutual Insurance of Michigan, Michigan’s Consumer Oriented and Operated Plan or COOP is among the 14 companies seeking qualification. A COOP is a new type of nonprofit health insurer whose members are owners of the company and comprise a majority of its board.

Application and Enrollment Process for subsidies and Public Coverage

In addition to purchasing health plans, individuals with incomes between 100% and 400% of the federal poverty level will be able to apply for sliding-scale premium and cost-sharing subsidies. A simplified, streamlined application has been developed. Applications for subsidies will be screened for potential Medicaid/MIChild eligibility and forwarded to the state for final determination. Medicaid eligibility will be simplified and based on income and citizenship. Applicants will no longer have to be part of a federally designated group to qualify. Asset limits for most groups will be eliminated Jan. 1, 2014.

Medicaid Expansion

The expansion of Medicaid eligibility to those with incomes up to 133% of the federal poverty level, included in the ACA, has been an extremely contentious issue in Michigan in spite of the governor’s strong support and inclusion of the federal funds to expand Medicaid eligibility and the state savings in his FY 2014 budget recommendation. Both the House and Senate rejected the governor’s recommendation. An alternate bill, H.B. 4714, was finally passed by both chambers in September 2013. The final bill requires federal waivers and focuses on healthy behaviors, beneficiary cost sharing and numerous program improvements. Due to the Senate denial of immediate effect, the Medicaid expansion will be delayed from the Jan.1, 2014 date included in the legislation, likely to April 1, 2014, leaving low-income, working residents uninsured for an extra three months.

Subsidy Calculator Available Now

The Kaiser Family Foundation developed a subsidy calculator that estimates the consumer’s share of annual premiums, the amount of their federal subsidies, and cost sharing limits based on income, household size, age, and tobacco usage. This calculator is available to obtain estimates until actual premium and cost-sharing information is provided through the Marketplace.

Consumer Outreach, Education and Enrollment

A key function of the Marketplace is consumer outreach, education, and enrollment. The Marketplace must be accessible through a website, by phone or in-person. Direct consumer assistance will be available to guide consumers through the process of comparing plans, choosing the option that best meets their healthcare coverage needs and budgets, and applying for tax credits. Every marketplace must have a Navigator program as well as Certified Application Counselors. Michigan received a $2.5 million federal grant for its Navigator program. Grants were awarded to:

  • Michigan Consumers for Healthcare – $1,319,345
  • Community Bridges Management, Inc. – $896,366
  • Arab Community Center for Economic & Social Services – $276,593
  • American Indian Health & Family Services of Southeastern Michigan, Inc. – $49,583.50

Even though “apples to apples” comparisons will be available in readily understandable terms rather than insurance jargon, consumer assistance will be essential to families and individuals to help them determine the plan that best meets their needs. Out-of-pocket costs, including copays and deductibles, provider networks, and the specific benefits will vary by plan, making selection of the right combination a challenge.

Consumer Protections

Consumer protections will also be a key function of the Marketplace and will provide confidence to those who purchase insurance coverage. Health plan premium increases will be monitored by the Marketplace to ensure they are reasonable and justified. Marketing standards will be established to prohibit unethical advertising and provider network standards will be established to ensure the plans sold in the Marketplace have adequate doctors and other providers available in their plans. Health plans will be required to report quality and customer satisfaction ratings to help consumers make informed choices. In addition, effective Jan. 1, 2014, health plans will no longer be allowed to deny coverage or charge higher premiums for adults (these protections for children were implemented in 2010) with pre-existing conditions, lifetime limits can no longer be imposed, and annual limits are phased out. Women will be charged the same rates as men for comparable coverage.