Michigan Association of Health Plans

Why Michigan Health Insurance Competition Matters

What does more competition in health insurance mean? It means more affordable premiums for Michiganders and their employer. It means a chance to invest valuable dollars in other parts of the business while keeping and attracting employees. It means bringing what has historically made Michigan a great business environment – competition.

Michigan’s health insurance market has been rated the third least competitive in the United States, according to the American Medical Association’s Annual Report on Competition. Our uncompetitive market is a concern for every Michigander with rising costs.

Michigan’s health insurance premiums for family coverage exceeded $20,000 per year in 2019 making Michigan the 18th most-expensive state to insure your family. In 2015, Michigan had the second most-affordable health insurance. As Michigan becomes less and less competitive, our premiums have risen, becoming a larger burden on individuals and employers.

These rising costs are forcing a decision for employers on how to take care of their employees. Michigan’s employers pay more than 80 percent of the health insurance premium for their employees. The average in the United States is around 70 percent. Employers in Michigan, competing in their own markets, are working hard to take care of their employees and attract talent with great health insurance packages. Every employer values competition in their market and others.

The cost of providing this care has risen nearly $5,000 since 2014, or 4.6 percent per year. In the most competitive states, the increase has been a much lesser 3.5 percent. Every dollar that has been allocated to maintaining health insurance benefits and these funds could be invested in people, technology, and innovation.

Competitors in any market push each other to improve cost, quality and care. Health insurance needs to be no different – but even the AMA shows this lags in Michigan, despite the 13 health plans that can offer coverage to Michigan employers.

Competition matters, especially in health care where it means improved access, lower costs and quality care.