The insurance companies offering health plans on Michigan's public exchange have a collective eye fixed on January 1, 2017.
That's when they hope they'll be able to start charging, on average, 17.2% more for individual health insurance plans.
Marianne Udow-Phillips joined us today to talk about what's behind these hefty rate increase requests.
She explained that for the first few years under the Affordable Care Act, insurance companies didn't know very much about who they'd be covering, and were largely guessing at what they should charge for coverage.
Now, a lot of them are finding out that they guessed low.
"They've now had a couple of years of experience with the population. Many people who came in on the exchange had not been insured before, and they had a big backlog of medical care needs. And so people have been using health care at higher rates than the insurers actually expected," she told us.
Aside from having a larger data set to work with, insurers are also preparing for several programs provided by the federal government to help stabilize rates through the first few years of the ACA to expire.
Some people might feel like their insurer is taking advantage of them and hiking prices now that they're on the hook, but Udow-Phillips says profiteering isn't the motive here.
"The health plans now have a little more information, and are setting more rates that are reflective of the total cost that people are experiencing," she said. “The real reason that health care insurance is really high-cost is because health care is high-cost.”
The insurance companies' requests will be heavily scrutinized by regulators at the state and federal levels to confirm that the data support the requested increases, and final rates are expected to be posted by November 1.