LANSING, Mich. (Michigan News Source) – Health care in Michigan is about to get a lot more expensive. Nearly 900,000 Michiganders could see their insurance premiums soar next year, with proposed double-digit increases set to hit both individual and small group policies.
According to a recent report from the Michigan Department of Insurance and Financial Services (DIFS), small businesses and individuals alike are bracing for average rate hikes of 11.2% and 10.7%, respectively, in 2025. These numbers mark the highest jumps in recent years, overshadowing the already steep increases approved in 2024.
Who’s behind the numbers?
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Leading the increase charge is Priority Health with an eye-popping 18.9% hike for individual market plans. Blue Cross Blue Shield of Michigan, the state’s largest insurer, covering over 276,200 customers isn’t far behind. They’re seeking over 11% more from small group plans and nearly 9% more for individual market HMO plans.
Both companies attribute these hikes to soaring costs across medical services, bigger claims, and skyrocketing prescription drug prices, particularly for expensive medications like GLP-1 drugs used to treat diabetes and obesity. These drugs include Ozempic, Regovy and Trulicity which are constantly being advertised on the airwaves.
Subsidies soften the blow – for now
For those buying insurance through healthcare.gov, there’s a silver lining – for at least a little while. The Affordable Care Act’s tax credit subsidies, which adjust based on income, will cushion the blow for many. These subsidies are set to continue through 2025, keeping out-of-pocket costs lower for middle-income earners. However, as insurers tighten their coverage, especially for costly drugs like GLP-1, even those with subsidies might feel the pinch.
What’s next?
Although the public comment period on these proposed rate hikes has ended, the final rates won’t be confirmed until October. While DIFS remains tight-lipped, Michigan’s small businesses and individual policyholders are left in a holding pattern, waiting to see just how much more they’ll be shelling out for health care in the coming year.
As the battle between rising costs and the need for affordable care continues, one thing is clear: Michiganders should prepare for a rough landing when their 2025 health insurance bills arrive.
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