Dear Michigan Democrats: Here's my healthcare policy wish list for my home state...


Dear Governor Whitmer, House Speaker Tate, Senate Majority Leader Brinks, House Health Policy Committee Chair Rogers & Senate Health Policy Chair Hertel:

Five years ago, ahead of the 2018 midterm election, I wrote an open letter to all Michigan Democratic legislative candidates with a healthcare policy wish list. It included 26 ways to Protect, Repair & Strengthen the #ACA at the state level, several of which overlapped with the Democratic caucus's "Michigan Health Care Bill of Rights."

Unfortunately, while Democrats made large gains in Michigan in 2018, we didn't quite flip control of either the state House or Senate; it would take another four years to pull that off. Fortunately, that did happen last November, giving Democrats a trifecta in the House, Senate and Governor's office at the same time for the first time in decades, so it's time for me to compile an updated version of my Michigan healthcare policy wish list.

Some of the items on the prior list are now moot, but others are just as important as ever (if not more so)...and still others have been modified or added given the current situation at both the state and national level. As you can imagine, most of these center around the Affordable Care Act but others overlap with non-ACA areas of the healthcare system.

With that in mind, here's my updated Michigan Healthcare Policy Wish List for 2023:


I've written about "Silver Loading" more times than I can remember over the past 6+ years; here's my simplified explainer about what it is and how it helps dramatically reduce net health insurance premiums for millions of people nationally.

The official name for what I and other healthcare wonks have referred to as "Silver Loading" is actually "Premium Alignment," and it's actually something which insurance carriers are supposed to be doing under the Affordable Care Act anyway...but which few bothered doing prior to 2018, and which many still don't do today.

The extremely short version is that under the ACA, healthcare premiums are supposed to be priced according to what their real world Actuarial Value (AV) is, not what the AV is "officially." A policy which covers 94% of the (aggregate) enrollee's healthcare expenses, for instance, should be priced accordingly, even if it "officially" only has a 70% AV rating.

This is particularly important with the Affordable Care Act because of the ACA's "Cost Sharing Reduction" (CSR) subsidies, which turn a "Silver" plan (official AV rating: 70%) into a "Secret Platinum" plan (real-world AV rating: 94%) for millions of enrollees.

On the surface, this may sound counterintuitive--how could raising the "sticker price" of insurance premiums reduce the net cost to the enrollees? However, as I explain here, due to how ACA subsidies are calculated, increasing Silver plan pricing actually leads to reduced premiums for most enrollees since the subsidies are increased accordingly, making Gold plans cost dramatically less for millions of people.

Over the past few years, many insurance carriers have voluntarily undertaken Premium Alignment pricing, and some states have mandated it via regulatory rules...but dozens of carriers in many states have either not "Silver Loaded" (Premium Aligned) at all or have only done so weakly. In Michigan, I believe it's hit & miss; some carriers do, some don't, but I don't think any of them (even BCBSM) fully embrace it. The best way of maximizing benefits and savings for ACA enrollees is for as many states as possible to mandate strict premium alignment via legislation.

There's actually strong bipartisan support for doing just that, in fact: New Mexico passed a law mandating premium alignment a couple of years ago, and while that may not sound surprising (NM has a Democratic trifecta), this one may: TEXAS passed a similar law a couple years back which just went into effect this year, and not only did it pass, it passed UNANIMOUSLY through the GOP-controlled Texas House and Senate and was easily signed into law by GOP Governor Greg Abbott with minimal controversy.

Result? In part thanks to the new Premium Alignment law, Texas saw their enrollment in on-exchange ACA healthcare policies jump by an astonishing 31% this year, from 1.84 million to 2.41 million people. A similar spike in Michigan would be around an additional 100,000 people enrolling here, although I wouldn't expect anything that dramatic.

In fact, recently a large coalition of healthcare & patient advocates sent an open letter to the U.S. Health & Human Services Dept. urging them to do this at the federal level via regulatory changes:

A coalition of patient advocates is urging HHS to address high out-of-pocket costs by demanding that insurers selling marketplace coverage strictly adhere to the Affordable Care Act’s rate-setting requirements. Insurers have strayed from the mandate in recent years by underpricing silver-tier plans and overpricing the more-generous gold-level products, the advocates say, highlighting an issue that experts have been raising for years and that some states are already addressing at the local level.

But health experts also say that HHS must fix misalignments in the risk adjustment program - and that exchanges must have strong consumer decision support tools -for a policy fix to be sustainable.

By clarifying and enforcing the ACA’s single risk pool requirement, HHS could significantly reduce consumers’ cost-sharing burdens while also discouraging gaming, the advocates say.

While I hope that the HHS Dept. will mandate this nationally, there's. no guarantee that they will (and of course HHS regulations can be reversed by a future administration). Michigan (and other states) should codify Premium Alignment at the state level either way.


One of the most important (but less-known) provisions of the Patient Protection & Affordable Care Act is Section 2713, which requires private health plans to provide coverage for a lengthy list of "preventative services" without any out of pocket cost sharing (co-pays, deductibles or coinsurance) to the enrollee as long as the services are performed by an in-network healthcare provider.

This list of services includes everything from immunizations and STD screenings to mammograms and diabetes screenings, and the benefits of this requirement should be obvious.

Unfortunately, there's Yet Another major anti-ACA lawsuit making its way through the U.S. federal court system right now which, if ultimately successful, could strip away this requirement for some or potentially all of the services covered under Section 2713. The stakes are huge:

“This is a huge deal,” said Tim Jost, a retired Washington & Lee University law professor who tracks ACA litigation and has written about the suit and other efforts by conservative groups in Texas to undermine the ACA and other health policies. “It’s billions and billions of dollars of services that Americans get every year, not just from ACA health plans but also from employer plans. If this benefit ends, it would mean a lot of people would forgo preventive services and end up with much worse medical problems.”

...The ACA’s elimination of cost sharing for screening of colorectal cancer led to a significant increase in the number of colorectal cancer cases diagnosed at an early stage in Medicare beneficiaries, according to a 2017 Health Affairs study.

...Most startling, coverage for COVID-19 vaccines would be threatened. In the 2020 CARES Act, Congress required insurers to cover any pandemic-related preventive services or immunizations recommended by PSTF or ACIP. Because ACIP has recommended the Pfizer, Moderna, and J&J vaccines, private insurers must cover them without cost-sharing. The same goes for any boosters that ACIP recommends. If the current lawsuit succeeds, however, private insurers could start billing for future vaccinations.

Michigan should pass legislation mandating zero-cost sharing coverage of these services just in case any of them are struck down at the federal level, which is a distinct possibility (U.S. District Judge Reed O'Connor, who has been openly hostile to the ACA in the past, is the one expected to issue his final ruling at any time now...and while his ruling will no doubt be appealed all the way to the U.S. Supreme Court regardless, it would be better for Michigan to make this a moot point at the state level).


Similarly, while the rest of the ACA seems to be relatively safe for the time being, it would still be a good idea to lock in as many of its protections as possible. I believe the first two items below (Guaranteed Issue and Community Rating) are already codified into Michigan law, but I don't think the rest are...and it wouldn't be a bad idea to review & strengthen the language of the ones which are as necessary:

  • Guaranteed Issue: Health insurance companies cannot deny coverage to anyone for having a pre-existing condition, nor can they subject enrollees to medical underwriting.
  • Community Rating: Health insurance companies cannot charge people higher rates or deductibles for a policy for having pre-existing conditions.
  • Gender Equality: Health insurance companies cannot charge more for a policy based on gender.
  • Limiting the Age Tax: Prior to the ACA (and under GOP repeal bills), seniors were often charged 5 times as much as younger enrollees; the ACA restricts the premium age band to a 3:1 ratio. We might consider going even farther--in Massachusetts it's limited to a 2:1 ratio and both New York & Vermont don't allow any age variance whatsoever (it's a 1:1 ratio).
  • Essential Health Benefits: All health insurance policies must include coverage of at least the same 10 Essential Health Benefits mandated by the Affordable Care Act.
  • No Annual or Lifetime Coverage Limits: Health insurance policies cannot include caps on annual or lifetime benefit limits on policies.
  • Minimum Actuarial Value: Health insurance policies must cover at least 60% of enrollees' healthcare expenses on an actuarially-determined level (60% for Bronze plans; 70% for Silver; 80% for Gold & 90% for Platinum).
  • Medical Loss Ratio: Health insurance companies are required to spend at least 80% of premium revenue on actual healthcare services for individual (nongroup) or small group market policies; anything under that has to be rebated to the policyholder. In the case of the large group market, the threshold is 85%. Again, we might even want to bump this up further--Massachusetts has an 88% MLR requirement for individual & small group plans, while it's 82% in New York.
  • Cap on Maximum Out of Pocket Costs: The ACA mandates that health insurance policies include a cap on the maximum amount that enrollees have to pay for medical services out of pocket regardless of how much the deductibles, co-pays and coinsurance are.
  • Young Adults on Parents Plans: Under the ACA, young adults are allowed to remain enrolled on their parents or guardians' insurance policies until they turn 26 years old.
  • Rate Review Protection: Under the ACA, insurance carriers which ask for rate increases of more than 10% per year have to undergo an additional regulatory process to review and justify those increases. Personally I'd lower the threshold to doesn't mean they can't ever raise rates more than that, it just means they have to justify doing so.


The ACA didn't actually ban so-called "Short-Term, Limited Duration" plans (STLDs), which don't include most of the protections listed above; instead, it laid out what provisions a policy had to include in order to qualify as ACA-compliant coverage to avoid having to pay the Individual Mandate penalty. Therefore, someone could still enroll in an STLD if they wanted, but they'd still have to pay the ACA penalty.

In 2016, the Obama Administration put some additional restrictions on STLDs, limiting enrollment in them to no more than 3 months per year (thus keeping them "short-term") and forbidding them from being renewed within the same year (thus keeping them "limited duration"). Because of this (as well as the fact that STLDs fall far short of comprehensive coverage and are often junk plans), only a small number of people have enrolled in STLDs over the past few years, limiting their adverse selection impact on the ACA market risk pool.

In 2017, however, Congressional Republicans effectively repealed the ACA's Individual Mandate...followed by the Trump Administration removing the 3-month and non-renewable regulatory limits on STLDs at the federal level, pushing the throttle wide open for junk plans to flood the market with no disincentive involved...other than the fact that these plans allow pre-existing condition denials, pricing discrimination, don't cover all 10 EHBs, have no minimum AV threshold, have annual/lifetime caps and so on. Basically, these are exactly the types of junk policies which the ACA set out to get people off of in the first place.

The Biden Administration is supposed to be issuing new federal regulations re. STLDs this April, but no one knows how strict those will be, and again, that could be undone by a future administration since it's regulatory, not legislative. Codifying it at the state level would be better.

Michigan does currently have some regulation of STLDs:

  • Total contract period for STLDs, including any renewal periods, cannot exceed 185 days out in a 365-day period (basically 6 months/yr)
  • Michigan keeps STLDs a small part of an major medical insurer’s individual market portfolio by limiting the share of individual market premiums an insurer can collect from them to 10%.

However, I urge MI lawmakers to go further. Some states have straight-up eliminated STLDs, such as New Jersey and California. If the enhanced subsidies of the American Rescue Plan & Inflation Reduction Act are kept in place permanently (currently they're scheduled to sunset at the end of 2025), I'd recommend doing the same and eliminating them outright, but even if the ARP/IRA subsidies don't continue, I still strongly recommend at least codify the Obama-era regulations restricting STLDs to no more than 3 months per year and preventing them from being renewable, as DC, Hawaii, Maryland and some other states have done.

FWIW, according to Louise Norris, there were 6 Michigan carriers offering STLDs last year: Companion Life, Independence American Insurance Co., National General, Priority Health, North River Insurance Co. & Golden Rule (owned by UnitedHealthcare).


Under the ACA, all individual market policies were supposed to be fully ACA-compliant (guaranteed issue, community rated, etc.) starting on January 1, 2014. Originally, the only exceptions to this were "Grandfathered" policies which people were already continuously enrolled in since 2010.

However, in response to the backlash over his "If you like it, you can keep it!" promise, President Obama had the HHS Dept. issue a policy change which allowed another batch of non-ACA-compliant policies (those enrolled in from 2010 - 2013) to be renewed for another year (these were called "Transitional" or "Grandmothered" policies).

The decision about whether to allow Transitional plans was left up to the individual states. Some states allowed them, some didn't. Even in the states which allowed them, it was still up to the individual insurance carriers whether to cut them off or not; some did, some didn't. Michigan, unfortunately, was among the states which did allow transitional plans. One way or another, that "one year" extension became two years...then three...and eventually the federal government kind of shrugged and gave permission for states to extend Transitional Plans indefinitely if they wanted to.

Just like with Short-Term plans, every Transitional Plan enrollee siphons away a healthy person from the ACA-compliant risk pool. Transitional plans probably shouldn't have been allowed in the first place, and even then they definitely shouldn't still be allowed 9 years later. It's time to cut them off and transition the remaining enrollees over to fully ACA-compliant policies, which would also improve the ACA risk pool.

The transitional plan market has been dwindling gradually every year; I don't know exactly how many Michiganders are still enrolled in them as of today, although a cursory look at SERFF database filings for 2023 suggests that it could be as few as ~6,500 or so (1,100 via Alliance Health, 1 (yes, one) via Golden Rule, and ~5,400 via Priority Health). This one isn't as high a priority as it was a few years ago, but it's still something which should be checked off the "to do" list.


Back in August 2021, Michigan's own Dept. of Insurance & Financial Services issued the following Cease & Desist Order:

The Michigan Department of Insurance and Financial Services (DIFS) has issued a cease-and-desist order against a healthcare sharing ministry and two connected companies for allegedly acting in violation of the Michigan Insurance Code.

“Health care sharing ministries can have a role in fostering the health, fellowship, and sense of community for individuals of faith, but they must follow the requirements of the law,” said DIFS Director Anita Fox. “The DIFS investigation showed that the companies under this cease-and-desist order are essentially operating as unlicensed health insurance companies, in violation of the Insurance Code.”

Though not considered health insurance under the Michigan Insurance Code, health care sharing ministries (HCSMs) are legal in Michigan under the Health Care Sharing Ministries Freedom to Share Act. They can provide assistance for individuals if certain requirements are followed, including collecting voluntary contributions from individuals who share a similar faith with no assumption of risk or promise to pay from the ministry to its participants. Plans that violate these terms may be considered health insurance companies and, if they are not properly licensed, they may be subject to action under the Michigan Insurance Code including a cease-and-desist order and possible fines.

The DIFS cease-and-desist order alleges that Aliera Companies is in violation of the law by marketing and selling memberships in a for-profit risk-transferring entity. Further, the order states that Aliera maintains direct control of two additional entities, Sharity Ministries and Ensurian Agency, and that all three entities broadly market HCSM plans to individuals and charge monthly premiums, which vary depending on age and health. Further, membership in the plans can be cancelled if a member chooses not to make their purportedly optional payments, a requirement that effectively makes the payments mandatory and violates Michigan’s HCSM requirements.

Now, Aliera has a long, ugly history of fraudulent practices; besides Michigan, they've had legal action taken against them by Washington State, New Hampshire, California, Colorado, Connecticut, Missouri, New York and New Jersey.  However, while Aliera (also operating under names like Trinity, Sharity and Ensurian among others) is a particularly egregious case, "Health Care Sharing Ministries" in general have a long, ugly history of scams & fraud. John Oliver did an entire episode of Last Week about them:

I don't know whether HCSMs can be completely eliminated here in Michigan (it could be tricky for various "religious freedom" reasons), but they should be minimized and regulated as strictly as possible.


Right now, 2.5% of the premiums paid by Michigan ACA exchange enrollees goes to pay for the marketplace fee which funds HealthCare.Gov. If Michigan broke off from and established our own full ACA exchange, 18 other states have done (including five within the past three years), we'd likely be able to either reduce that cost by a good half a point or so (saving tens of thousands of Michigan residents an average of $32/year) or by funding it via other means, reducing their premiums by up to $160/year.

This is hardly a new idea...and it has solid bipartisan support! While most of the states with their own ACA exchange are solid blue, deep red Idaho launched theirs in 2014 (Your Health Idaho); the GOP-controlled legislature in Pennsylvania established a SBM under a Democratic governor a few years back (Pennie); and even Georgia has now put plans in montion to transition from the federal exchange to their own marketplace as soon as this fall.

For that matter, a bipartisan group of Michigan lawmakers already introduced a bill to do just this last summer--House Bill 6112:

The Michigan Legislature is considering joining the 18 other states that have established state-run health insurance marketplaces through HB 6112. Having an exchange run by the state instead of the federal government, supporters of the bill say, will save Michiganders money by leaving the “rigid and inflexible” federal market for a Michigan-tailored market that can be more responsive and potentially lower premiums. The bill is still in the early days of the legislative process, awaiting a vote from the House Health Policy Committee.

...It's particularly noteworthy that not only is a Republican legislator the primary sponsor of the bill (Mark Tisdel), but so are 4 of the other 7 cosponsors (John Roth, Bradley Slagh, Jim Lilly and Gary Howell)...along with three Democratic state Representatives (Jim Ellison, Sara Cambensy and Kevin Hertel).

So, what are the benefits of moving from the federal exchange to a state-based ACA exchange?

Well, besides some cost savings (not as dramatic as it was a few years ago, since CMS has reduced the fee from 3.5% down to 2.5% in recent years), but doing so also allows states more flexibility to improve how the ACA operates in their state, as well as the technical ability to add enhanced financial aid to enrollees.

For instance:

  • Colorado, Massachusetts & Vermont offer additional help for enrollees earning as much as 300% FPL
  • Connecticut offers $0-cost coverage for many enrollees earning up to 175% FPL
  • Minnesota and New York have implemented Basic Health Programs via the ACA which they're planning on expanding to more people
  • Maryland offers additional savings specifically for younger enrollees, helping improve the overall risk pool
  • New Jersey offers additional savings for enrollees earning up to 600% FPL
  • New Mexico just launched a program offering $0 premiums for those earning up to 200% FPL and reduced costs from 200 - 400% FPL
  • Washington State has a unique program offering $0 premiums for employees of child care facilities earning below 300% FPL get the idea. Funding for these programs obviously varies by state, but I don't think any of them would be logistically feasible unless the states in question operated their own ACA exchanges.

This is part of a growing trend. In addition to the five states which have mad the move in recent years, there's also Georgia (noted above), Virginia is launching their SBM this fall, and according to this story by Amy Lotven, other states considering doing so include Arkansas, Illinois, North Carolina and even Texas. Again, even the reddest states seem to have finally (if grudgingly) gotten over their intense hatred of the law and some are finally trying to actually make lemonade out of lemons by working to make it more effective.

IMPORTANT: Assuming Michigan does establish our own state-based ACA exchange, one vitally important feature which should absolutely be baked in is the capability for Enhanced Direct Enrollment (EDE) partners to hook into the API. EDEs include 3rd-party web brokers like Health Sherpa, W3LL, Stride Health and so forth to tie directly into the federal subsidy eligibility system so that they can easily offer on-exchange ACA market policies to enrollees without having to dual-enter data.

This is a big deal for several reasons.

As Amy Lotven notes over at Inside Health Policy:

...any refresh would add the enhanced direct enrollment (EDE) option offered by that lets web-brokers and insurers enroll consumers without having to go through the federal eligibility hub.

The EDE entities bring in a good portion of enrollment, but no state exchange has implemented the system. But Miller says some are thinking about it. He advises any state that moves forward to use the same technology as CMS.

Former CCIIO Director Randy Pate, who led the implementation of the EDE system while at CMS, also says that any state that transitions to an SBM should build in the EDE from the ground level.

I absolutely agree with this, however, and it has nothing to do with Sotheon being an advertiser on this site (via the W3LL banner ads). HealthSherpa, the largest EDE on the market (also an ACA Signups advertiser) appears to have either directly or indirectly handled as much as a stunning 50% of total HealthCare.Gov enrollment over the past Open Enrollment Period. In fact, the rapid growth of EDEs on the federal exchange is part of the reason why enrollment growth has outstripped state-based exchange enrollment this year (the main reason, of course, is that all of the states refusing to expand Medicaid are hosted by the federal exchange).

The actual portion of enrollment handled via Health Sherpa ended up being around 35% during the most recent Open Enrollment Period, not 50%, but that's still a massive chunk of ACA enrollment, and when you throw in the other EDEs it could very well be 50% of FFM enrollment. Any state moving to their own exchange should definitely incorporate this functionality if they can.


I debated whether I should even include this one since it's so blatantly obvious and has already been loudly called for by Gov. Whitmer, but I'm throwing it in for the heck of it:

Michigan residents who buy health coverage in the private marketplace after Thursday will not have access to abortion coverage, even if a pregnancy is the result of rape or incest. On that day, a new state law goes into effect that prohibits insurance companies from covering abortion services unless customers purchase separate add-ons -- called riders -- to their insurance plans ahead of time. No insurance companies will be offering those riders to new customers in the private marketplace after Thursday, according to the state's Department of Insurance and Financial Services.

Not only should the "rape insurance" law be repealed immediately, legislation should also be passed which goes completely the other direction, mandating that all major medical policies cover abortion & other reproductive medical services.

It should be noted that while 25 states (including Michigan at the moment) have various restrictions on health insurance coverage of abortion, there are 8 others (CA, IL, ME, MD, MA, NY, OR & WA) which actively require private insurance plans to cover abortion with no cost sharing (New Jersey recently announced a requirement of abortion coverage via regulatory authority but I don't think it's been codified into law yet). Michigan should join them.

Note: There's sort of an exception to the "no cost sharing" rule for ACA exchange policies: Under the ACA, federal subsidies can't be applied towards abortion coverage, so insurance carriers are required to charge a separate $1/month premium for that, which means in some states enrollees who are eligible for $0/month exchange policies after federal subsidies still have to pay $1/month anyway. This is one of the more absurd interpretations of the Hyde Amendment, but it is what it is.

California actually covers the cost of this "abortion rider" themselves, so enrollees never actually see that $12/year charge, but this asinine compromise in the ACA has also led to some pretty surreal consequences.


Here's a simple explanation of what All-Payer means from Sarah Kliff of Vox way back in 2015:

All-payer rate setting, as the system is known, shares the same goals of single-payer: it aims to increase efficiency and reduce insurer overhead in the health care system. Single payer does this by eliminating private plans for one government plan. All-payer rate setting gets there by setting one price that every health insurer pays for any given medical procedure.

"[All payer] has everything except the government-run plan," says Mark Pauly, a health economist at University of Pennsylvania. "In all-payer systems, the government uses Blue Cross and other insurers as their agent. For consumers its the exact same except for who they write their check for premiums to."

...Right now, there is huge variation in health care costs at different hospitals and doctor offices. The reason is different health-insurance plans pay different prices for medical care. That means the price of an MRI scan or knee replacement surgery, for example, can vary widely, depending on how good an insurance plan is at negotiating.

Bigger plans tend to negotiate deeper discounts. Most research shows that private insurance plans pay the most, Medicare pays slightly less, and Medicaid pays the lowest rates. And even between different private insurance plans, there can be huge variation — a bigger plan with more members might be able to ask hospitals for lower prices because it can promise lots of patients.

Read the whole thing for more details. The point here is that Maryland recently experimented with All-Payer on a limited basis, and it worked well enough that they expanded the program a few years later:

Maryland Gov. Larry Hogan signed a contract with the federal government on Monday to enact the state’s unique all-payer health care model, which he said will create incentives to improve care while saving money.

Hogan signed the five-year contract along with the administrator of the federal Centers for Medicare and Medicaid Services, Seema Verma.

...The Hogan administration said the new contract is expected to provide an additional $300 million in savings a year by 2023, totaling $1 billion in savings over five years.

Maryland is the only state that can set its own rates for hospital services, and all payers must charge the same rate for services at a given hospital. The policy has been in place since the 1970s, though Maryland modernized its one-of-a-kind Medicare waiver about four years ago to move away from reimbursing hospitals on a fee-for-service basis to a fixed budget.

Because that change focused on hospitals only, the federal government required the state to develop a new model that would provide comprehensive coordination across the entire health care system.

Under the agreement, Maryland will be relieved of federal restrictions and red tape that the other 49 states face in the Medicare program. However, the state will have to meet benchmarks of improving access to health care while improving quality and reducing costs.

I know of quite a few progressive healthcare wonks who are more excited about All-Payer than they are about Single Payer, although obviously your mileage may vary.

There are plenty of other bills which could improve things as well, of course (I haven't even touched on prescription drugs), and I'll be happy to update this list further as appropriate, but passing the items above would dramatically improve the affordability and stability of healthcare coverage in Michigan for hundreds of thousands of Michiganders.