Michigan: *Final* Avg. Unsubsidized 2024 #ACA Rate Change: +5.3%...w/one carrier bailing for an interesting reason...

Back in June (updated in July), I posted an analysis of the preliminary 2024 rate filings for Michigan's individual & small group market carriers. At the time, there wasn't anything terribly interesting going on in my home state other than Humana and McLaren pulling out of the small group market (Humana is doing this nationally). Overall 2024 rate increases averaged 5.6% and 7.1% on the indy and small group markets respectively.

Yesterday, however, the Michigan Dept. of Insurance & Financial Services posted the final/approved rate filings for 2024, and while there were only a couple of very minor tweaks to most of the preliminary requests, there's one important change: US Health & Life Insurance Co. is no longer going to be on the Michigan individual market at all:

Huh. US Health & Life only has around 5,500 indy market enrollees in Michigan, but aside from asking for a steep rate hike (nearly 19%), there's no obvious reason for this sudden change. So what's going on?

Well, as my colleague, the brilliant Louise Norris noted yesterday: If you dig into the original and updated SERFF filings and look at the objection response letter, the answer becomes clear.

Response to USHL-133651027 Objection Letter Dated August 15, 2023

US Health and Life Insurance Company (“USHL”) adheres to the requirements of Section 1557 of the Affordable Care Act and the Michigan’s Elliott-Larsen Civil Rights Act. USHL provides medical and mental health coverage to all individuals regardless of race, color, national origin, sex (including gender identity), age or disability. We do not discriminate in our enrollment, eligibility, or administration of benefits for any covered services.

USHL respectfully requests that the Michigan Department of Insurance and Financial Services(“DIFS”) approve the inclusion of the policy exclusion language “Services or supplies associated with sex changes/gender reassignment, and services related to sexual function, and any related complications” (the “Exclusion”).

If this language is unacceptable but there is language that would be acceptable that allows us to offer mental health care for gender dysphoria while excluding medical, hormonal and surgical treatments, we would like DIFS to advise on acceptable language. If no language maintaining mental health care but excluding medical, hormonal and surgical treatments for gender dysphoria is acceptable, please advise.

For the following reasons, we believe we should be able to maintain an Exclusion on medical and surgical services:

• The Exclusion is consistent with the exclusion contained in the Michigan EHB Benchmark plan (“Benchmark Plan”)
• The Exclusion does not violate Section 1557 of the Affordable Care Act or the Michigan Elliott-Larsen Civil Rights Act
• Even if the Exclusion does violate applicable law, USHL is a wholly-owned subsidiary of Ascension, a faith based organization, and qualifies for an exemption based on the Religious Freedom Restoration Act (“RFRA”) and other applicable law

At this time USHL finds it necessary to request exemption from any requirement for an Issuer/Health Plan to provide Sexual/Gender Transition Surgery as well as hormone therapies provided to individuals for Gender Transition. USHL will still provide any Mental Health support for any person regardless of Sex or Gender Identity.

Annnnd there you have it: The state requires US Health & Life to cover gender transition surgery & hormone therapy; US Health & Life is refusing, so they're bailing from the individual health insurance market altogether.

1. The Exclusion is contained in the Benchmark Plan

USHL is of the opinion that the Exclusion language is consistent with the current exclusion contained in the Benchmark Plan. Gender affirming medical and surgical remedies are exclusions in the Benchmark Plan.

USHL’s proposed benefit offerings for plan year 2024 were determined following analysis of what benefits must be covered under the requirements for essential health benefits as dictated by the Benchmark Plan, which includes the Exclusion.

2. The Exclusion does not violate Michigan’s Elliott-Larsen Civil Rights Act or Section 1557 of the Affordable Care Act

USHL believes the policy Exclusion language complies with all current federal and state law, specifically Michigan’s Elliott-Larsen Civil Rights Act and Section 1557 of the Affordable Care Act. As discussed above, USHL provides medical and mental health coverage to all individuals regardless of race, color, national origin, sex (including gender identity), age or disability. We do not discriminate in our enrollment or our eligibility for benefits for any covered services. Our systems are configured such that we do not deny claims we receive based on sex, specifically.

Moreover, specifically as it relates to coverage for care related to gender affirming care, we do not have a categorical exclusion of coverage for care related to gender affirming care. Our plan does offer mental health treatment, and only excludes certain treatment as it relates to medical and surgical intervention for any reason–it is not specific to race, color, national origin, sex (including gender identity), age or disability. The World Professional Association of Transgender Health outlines the clinical guidelines for treating gender dysphoria in its Standards of Care for the Health of Transsexual, Transgender, and Gender Nonconforming People, 7th Edition (2011) (the "WPATH Standards of Care"). The WPATH Standards of Care identify psychotherapy, hormone therapy, and a number of surgical procedures as accepted treatment options for gender dysphoria. We are not categorically excluding all recommended treatment options, our plan provides coverage for psychotherapy as a treatment option.

Gender transition or gender affirming care mental health care services do not have any additional limitations, restrictions or coverage variations from mental health care received for any other purpose.

There is no current or proposed state or federal legislation that requires issuers to cover all services related to gender-affirming care for transgender individuals—or all medically necessary services generally. Issuers retain flexibility in designing their benefit packages, and there is no current or proposed federal legislation that requires issuers to cover any particular benefit or to cover all medically necessary services. The legislation requires, and USHL does, apply standards in a consistent, neutral, nondiscriminatory manner that does not limit or deny coverage or services to individuals based on a protected class.

There have not been any finalized changes to Section 1557 since our acceptance as a QHP in Michigan in 2022 that would necessitate a change in our plans and benefits for the 2024 Plan Year. While there is a Notice of Proposed Rulemaking that was published on August 4, 2022, those changes have not been finalized and there is no published timeline for when they might come into effect. If there are any finalized and published changes to Section 1557, we will review and implement any applicable provisions at that time.

3. Even if the Exclusion does violate applicable law, USHL is a wholly-owned subsidiary of Ascension, a faith based organization, and qualifies for an exemption based on the Religious Freedom Restoration Act (“RFRA”) and other applicable law.

And why do they have such a beef with transgender care? Well, you see, US Health & Life is a subsidiary of Ascension Care Management Holdings, and...

Because of Ascension’s status as a Catholic organization, USHL is not able to provide “sex change/gender reassignment” medical and surgical services as a covered benefit. Removing this exclusion would present an insurmountable barrier for our organization and we would be unable to continue as a carrier in the State of Michigan for 2024. If DIFS interprets state or federal law as requiring the removal of this exclusion, we request an exemption from these particular provisions under 42 U.S. Code Chapter 21B, the Religious Freedom Restoration Act (RFRA) or any other applicable law.

We are open to revising the current Exclusion language, as long as we would be able to retain an exclusion on the aforementioned medical and surgical services. For example, we have re-written the Exclusion language in other states for clarity to read as follows “Transgender surgery, including medical and hormonal therapy in preparation for and subsequent to any such surgery is excluded.”

USHL adheres to the requirements of Section 1557 and Elliott-Larsen Civil Rights Act. USHL by providing medical and mental health coverage to all individuals regardless of race, color, national origin, sex (including gender identity), age or disability. For all of the reasons described above, USHL respectfully requests that DIFS approve the Exclusion language in the 2024 policy forms.

There you have it. This was sent on August 15th. A few weeks later, on September 7th, US Health & Life formally withdrew from the Michigan ACA individual market:

Director Fox:

Upon the direction of the Michigan Department of Insurance and Financial Services (“DIFS”), US Health and Life Insurance Company (“USHL”) is providing notice that DIFS considers DIFS’ disapproval of USHL 2024 policy forms to constitute a USHL withdrawal from the Michigan individual health plan market for plan year 2024. This withdrawal will impact approximately 5,268 Ascension Personalized Care (“APC”) members in five counties and is effective January 1, 2024. USHL is submitting for approval as part of this filing a ‘Notice to Member’ letter explaining that APC will no longer be offering individual health plans in Michigan in 2024 and how they can obtain alternative coverage in the Marketplace.

It is our goal to ensure that our APC membership continues to receive the care and services they need through the end of this year, and we will support a smooth transition. It was our honor to provide health care benefits and services to the individual market in the counties we served and appreciate the opportunity to serve the Michigan community in the future.

Please let us know if you have any questions or concerns.