If you buy health insurance on the individual market, without help from an employer, you may want to know what Michigan is doing to protect you from unfair and unnecessary premium rate increases. Here’s a summary of the Michigan laws that govern rate increases. Caution: the laws and regulations on the books don’t always reflect what actually happens in practice. Contact your state’s insurance agency for further information.
- Michigan does require non-profit insurers and HMOs to obtain state approval of rate increases before they go into effect. Insurers need only file rates for commercial insurance products before they go into effect.
- Non-profit insurers must file rate increase requests with the Office of Financial and Insurance Regulation at least 120 days before the proposed effective date of the rate increase. MICH. COMP. LAWS § 550.1610. Regulators may approve, disapprove, or modify the proposed rates within the time frame based on whether they are “equitable, adequate, and not excessive.” MICH. COMP. LAWS § 550.1608.
- Non-profits must file detailed justifications for rate increases. MICH. COMP. LAWS § 550.1610. Subscribers may request a rate hearing regarding the proposed increase. MICH. COMP. LAWS § 550.1613
- For HMO products, insurers must file rating methodologies used to set rates and rate increase requests with justification at least 60 days before the proposed effective date. MICH. COMP. LAWS § 500.3525. Regulators determine whether HMO rates are “fair, sound, and reasonable in relation to services provided.” MICH. COMP. LAWS § 500.3519
- For commercial insurance products, insurers must certify that benefits are reasonable in relation to premiums.
- Rate filings are not posted online. A summary of rate regulations is available at http://www.michigan.gov/dleg/0,1607,7-154-10555_12902_35510_35514—,00.html.
Information is based on review of state statutes and regulations and in some case, interviews or emails with state insurance departments.