Reforming Michigan Health Insurance


State lawmakers are seeking to reform Michigan health insurance. As per the case in many locales around the nation, health care costs are rising in Michigan and the number of uninsured is rising. Currently, an estimated one in eleven Michiganders, or 1.2 million, are without insurance. Reforming Michigan health insurance is a top priority for the state that is losing revenue at an alarming rate.

The most current bill seeks to create the program Insure Michigan. This program, designed to create affordable Michigan health insurance, will seek to provide public policies for families of two making between $19,000 and $43,000 per year. Lawmakers believe targeting these families who sit at 200-300% above the federal poverty level will go a long ways towards reforming health care access in the state.

A number of steps are involved in this plan to provide more affordable health insurance policies for those in this income category. Lowering reimbursement rates paid to doctors by commercial providers will in turn lower reimbursement rates paid out by Medicare. While seen by some as a positive step in lowering Michigan health insurance costs, some fear this will drive more practicing doctors out of the state.


Addressing catastrophic claims is also a top priority for lawmakers seeking reform for Michigan health insurance. To address the problem of companies refusing to carry high-risk patients, lawmakers are proposing the creation of a state fund to reimburse insurers for such claims. Part of the legislation under debate concerns the creation of the Michigan Catastrophic Protection Plan (MCPP).

Under current design, the MCPP would reimburse insurance companies for claims above $25,000 and up to $250,000. After $250,000 insurance companies would be required to begin paying again. Some experts say improving Michigan health insurance rests on the idea of lowering risks and costs of catastrophic claims.

The proposal as to how to fund the MCPP could cause problems. The plan to fund the MCPP involves assessing fees to insurance companies in the state based on their market shares. This is in essence, having the insurance companies insure each other against these catastrophic claims. Some worry the proposal to issue these fees will hamper any real Michigan health insurance reform and may drive some insurance companies out of the state, reducing competition.

In the end, falling state revenues endanger the possibility of Michigan health insurance reform. As private companies and individuals leave the Great Lakes area fewer and fewer tax payers are left to fund such programs. Cutting state spending in other areas will be needed if lawmakers seeking to overhaul Michigan health insurance want to see their plans enacted.