Dear Michigan Democrats: Here's my 2027 Healthcare Policy Wish List!

Thu, 11/12/2026 - 4:30pm
Michigan

Dear Governor-elect Benson, House Speaker-elect Ranjeev Puri & Senate Majority Leader-elect Camilleri:

First of all: Mazel Tov on your resounding victory!

Eight 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."

Five years later, when Michigan Democrats were finally able to win a trifecta, I updated & revised this wish list, and was pleased to see them cross about half of the items off the list during the 2023-2024 legislative session.

Now that you're about to retake full control of the state House while retaining control of both the state Senate and the Governor's office, it's time to put the other half of the list back on the table, along with some new items. Given that Donald Trump still controls the White House at the federal level, it's more important than ever for state governments to step on improving healthcare policy.

With that in mind, here's my updated Michigan Healthcare Policy Wish List for 2027:

1. MANDATE MAXIMIZED PREMIUM ALIGNMENT!

I've written about "Silver Loading" more times than I can remember over the past 9 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.

Technically speaking, however, Silver Loading is really a subset of a larger pricing strategy called "Premium Alignment." 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 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; the list of states which have formally adopted Premium Alignment policies (either via regulatory rules or actual legislation) include:

There are several other states which I believe have Premium Alignment policies as well but which may "only" utilize Silver Loading (it's hard for me to pin down in some cases).

Result? Here's what happened in Texas via my friend & colleague David Anderson, assistant professor in Health Sciences, Policy & Management at the University of South Carolina:

Principal Findings:

  • Premium alignment reduced the lowest bronze plan’s pre-subsidy premium by $9.4 (SE = $2.8) and the lowest bronze plan’s post-subsidy premium for enrollees with incomes between 300-400% of the Federal Poverty Level by $14.2 (SE = 2.6).
  • Enrollment among this relatively higher income group, in turn, increased by 18.5% (SE = 2.6%).
  • Premium alignment raised silver pre-subsidy premiums without affecting post-subsidy silver premiums; decreases in gold pre- and post-subsidy premiums were similar to bronze plans.
  • We also find roughly 18% enrollment increases among enrollees with incomes between 200-250% FPL and 250-300% FPL, which may be driven by the improved affordability of higher generosity gold coverage. Pre-trends tests are null.
  • Enrollment below 200% was unaffected, likely because they already had generous zero-dollar coverage available prior to premium alignment.

Conclusions:

Premium alignment appears to be a powerful tool to increase the affordability of Marketplace coverage for enrollees with incomes above 200% FPL that do not already have access to generous zero-dollar coverage.

In fact, awhile back 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.

Michigan (and other states) should codify Premium Alignment at the state level.

2. ESTABLISH A FULL STATE-BASED EXCHANGE.

If Michigan were to break off from HC.gov and establish our own full ACA exchange, as 22 other states have already done (including Oregon this year and with Oklahoma next in line to do so), there would be several important benefits to the residents of the state.

For starters, right now, 2.5% of the premiums paid by Michigan ACA exchange enrollees goes to pay for the marketplace user fee which funds HealthCare.Gov (this is currently scheduled to drop to 1.9% next. year). If we transitioned to our own exchange, that money--which amounts to ~$197/year per enrollee this year (around $70 million/year total, could be kept in-state via Michigan-based vendors (the federal fee is scheduled to drop to 1.9% next year...but average Michigan ACA premiums are scheduled to go up by 14.5%, which cancels out most of that reduction).

Other benefits of a state-based exchange include greater local control over offering Special Enrollment Periods (SEPs) during the off-season if they wish and greater flexibility on things like marketing, outreach and so on.

Assuming Michigan does establish our own state-based ACA exchange, I'd also advise doing so in a way which allows Enhanced Direct Enrollment (EDE) partners to hook into the API. EDEs include 3rd-party web brokers like (ACA Signups sponsors) Health Sherpa & W3LL 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.

The good news is that a bill to move Michigan to a state-based ACA exchange actually already passed the state Senate earlier this year; it should be re-introduced in both the state Senate and House in 2027 in order to hopefully have a shiny new SBE ready to launch as early as 2028.

Oh yeah...there's one more important benefit of initiating a state-based ACA exchange: Doing so would also allow Michigan the technical ability to...

3. OFFER SUPPLEMENTAL FINANCIAL SUBSIDIES (requires a SBE):

A dozen states either already offer their own ACA subsidies to mitigate the lost federal ones or are newly-launching their own in 2027 (see Rhode Island & Virginia).

For instance:

  • California is covering the lost federal subsidies for all enrollees earning up to 150% FPL and a portion of it up to 200% FPL
  • Colorado is providing up to $70/month per enrollee for households earning up to 400% FPL, along with their unique "OmniSalud" program for undocumented immigrants
  • New Mexico is fully replacing all lost federal subsidies for every enrollee!

With the Trump Regime and Congressional Republicans allowing the enhanced federal subsidies to expire last year, this has become even more important, although ideally Michigan would still offer toned-down versions of this assistance even if the federal tax credits are restored to full strength, as some other states were doing.

Funding for these programs obviously varies by state and would have to passed via separate legislation, but a state-based exchange is only logistically feasible if the state in question operates their own exchange.

Speaking of an SBE allowing greater control over Special Enrollment Periods, if they do so, Michigan Democrats should also...

4. MAKE PREGNANCY A QUALIFYING LIFE EVENT (requires a SBE):

As my friend Louise Norris notes:

In most states, pregnancy does not trigger a special enrollment period to sign up for health insurance outside of the annual open enrollment period. HHS considered that possibility, but clarified in 2015 that it had opted not to include pregnancy as a qualifying life event. (The birth of the baby is a qualifying life event in every state, but that special enrollment period doesn't begin until the baby is born, meaning that the new health plan will not cover costs related to the pregnancy.)

However, state-run exchanges...have some flexibility to set their own rules for qualifying life events and special enrollment periods. And more than half of the state-run exchanges have chosen to allow a special enrollment period triggered by pregnancy.

This makes the pregnant person eligible to enroll in health coverage and have better access to prenatal care as well as coverage for labor and delivery costs. (In most cases, this special enrollment period applies to people who don't already have coverage, as opposed to an opportunity to change plans, but the specific rules vary from one state to another.)

Again, this is something which would require Michigan to already have an SBE in place, but I figured I'd mention it...as well as...

5. "EZ ENROLLMENT" WHEN FILING STATE TAXES (requires a SBE):

Again turning to Norris:

An easy enrollment program is a system that allows people without health insurance to check a box on their state tax return, giving the state department of revenue permission to share pertinent details with the state Medicaid office and health insurance exchange/Marketplace. That information is then used to make a preliminary determination about whether the tax filer and their family members might be eligible for financial assistance with their health coverage - either Medicaid/CHIP or a premium tax credit (subsidy) in the exchange.

The state Medicaid office or health insurance exchange will then reach out to the tax filer, notify them of the coverage and financial assistance for which they may qualify, and provide enrollment assistance.

As of this writing at least 10 states offer this feature, including Colorado, Illinois, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New Mexico, Pennsylvania and Virginia.

It's worth noting that Illinois and Virginia only offered this for Medicaid initially until their full state-based exchanges were ramped up a year or two later, at which point they expanded it to include ACA exchange coverage as well. Michigan should proceed similarly.

6. ESTABLISH A BASIC HEALTH PLAN (BHP) PROGRAM:

I'm happy to report that Michigan State Rep. Mai Xiong & state Sen. John Cherry have already introduced exactly this bill (cleverly branding it as a "Medicaid Buy-in Program" which it technically isn't but it's close enough to in my book):

LANSING, Mich., Aug. 26, 2026 — State Rep. Mai Xiong (D-Warren) and state Sen. John Cherry (D-Flint) introduced legislation this week to create a Medicaid buy-in program to make affordable healthcare available for more Michiganders. House Bill 6274 and its companion, Senate Bill 1152, would enable Michiganders earning between 138-200% of the federal poverty level to enroll in the program, giving working class families who don’t typically qualify for Medicaid assistance a more cost-effective alternative to other marketplace plans.

“Health premiums are skyrocketing and too often workers on the frontlines of the construction, food service and home care industries are forced to budget out the largest percentage of their paycheck just to keep their families covered,” Xiong said. “Our legislation gives hardworking Michiganders who don’t qualify for public healthcare assistance programs an affordable option. No matter what job or industry someone works in or income level, they deserve access to healthcare.”

...Similar Medicaid buy-in legislation, otherwise known as a Basic Health Program (BHP), has been implemented by three other states and Washington, D.C., through the use of federal funding.

And what is a Basic Health Plan, exactly?

...In short, if you earn up to 138% FPL, you enroll in Medicaid; from 138 - 200% FPL, you enroll in a Basic Health Plan policy (BHP); at 200% FPL or higher, you enroll in a Qualified Health Plan policy (QHP).

Federal funding for BHP programs is supposed to be equal to 95% of the total amount of advance premium tax credits (APTC) and cost sharing reduction (CSR) assistance that the enrollees would otherwise have been eligible for had they otherwise enrolled in a QHP using the ACA exchange.

Of course, the state itself can also throw in additional funding to make the BHP plans more generous if they wish...which is a key point to keep in mind. The coverage has to be at least as affordable and at least as good as a benchmark silver plan with Cost-sharing reduction benefits applied.

BHP programs currently provide very low-cost, comprehensive healthcare coverage, generally via private insurance carriers for around 1.5 million Americans across New York, Minnesota, Oregon and the District of Columbia. Michigan joining this list would be very helpful to perhaps ~240,000 low-income Michiganders (nearly half the ACA enrollment population, in fact), plus an unknown number of additional currently uninsured residents.

7. BAN THE SMOKING SURCHARGE (hear me out):

One of the most important philosophical underpinnings of the Patient Protection & Affordable Care Act was to eliminate something called "medical underwriting," which is essentially the practice of basing each individual's premiums for a given insurance policy based on their personal medical history and/or condition. Under the ACA, you can no longer be discriminated against based on things like your gender, weight or other "pre-existing" medical conditions. In addition, under the ACA, you can't be charged more based on your profession, hobbies and the like.

In short, the only variables allowed in calculating how much a specific ACA-compliant insurance policy under the ACA are your age (within a 3:1 ratio from 21 - 64 yrs old); geography (which "Rating Area" you live in)...and whether or not you smoke tobacco.

That's right: The ACA made one major exception for "behavorial penalties..." being a smoker:

  • Although insurers can’t charge more for health status, they can charge up to 50% more for smoking status. On the flip side of this [the ACA] includes smoking cessation therapy (including medication) as a free preventive service.
  • You can’t be denied coverage for being a smoker now or in the past.
  • Small group plans offered by small employers must also cover smoking cessation. Typically Medicaid, Medicare, and large group plans also offer smoking cessation therapy...
  • Extra specialized cessation therapy is offered to pregnant women.
  • In general you count as a smoker if you use tobacco four or more days a week for the past 6 months. If you are quitting, or smoke once in a while, or use tobacco for ceremonies, you may not qualify as a smoker.
  • You must report whether or not you are a smoker. Giving the information is based on the honor system, however you can be denied coverage due to fraud or misrepresentation, so answer honestly.
  • Those on employer health plans can avoid the surcharge by joining an employer based tobacco cessation program.
  • The tobacco premium surcharge is calculated after cost assistance, not before.
  • Statistically, lower-income Americans are the most likely group to smoke.

The 2nd-to-last bullet above is the real killer (no pun intended): The smoker surcharge is not included when your tax credits are calculated, which can make a dramatic difference. For example, let's take a 50-yr old single adult living in Oakland County, Michigan...and let's say that he earns $40,000/year (around 255% of the Federal Poverty Level, or FPL).

If he isn't a smoker, he can get a Silver policy from Ambetter/Meridian for as little as $263/month after $451/month in tax credits, with a $4,700 deductible.

If, however, he checks off the "tobacco user" box on the application form, the exact same plan will jump to $371/month even after the tax credits are applied.

This is technically an 82% increase, but that's because the tobacco surcharge is applied to the unsubsidized premium: It went from $714/mo to $$821/mo (in this case, Ambetter is actually being "generous" since they're only tacking on a 15% surcharge instead of the 50% they're legally allowed to.)

On the surface, this may make sense: Smoking causes massive amounts of expensive medical problems, so it may seem logical to make an exception to the "behavorial choice" rules.

HOWEVER...there's a few problems with this, which I delved into a few years back:

...Of course that was in 2016, some six years ago. What about today? Well, a similar, updated study was published at Health Affairs just last month, and while it's not publicly available, the conclusion seems to be pretty much the same:

...We found that the tobacco surcharge rate averaged approximately 14 percent and that it was associated with lower total enrollment as well as a reduced share of total enrollees who reported any tobacco use. Our analysis also found that tobacco surcharges have a significantly larger effect on tobacco users’ share of enrollment in rural areas than in urban areas, which may in turn contribute to urban-rural health disparities. Given that tobacco surcharges may decrease Marketplace enrollment overall and shift the composition of enrollment away from tobacco users, our findings suggest that reducing tobacco surcharges may increase total Marketplace enrollment.

Here's the thing, though: On the surface this may sound like you're reducing premiums by effectively kicking smokers to the curb, what actually happens is that only the sickest smokers end up enrolling in coverage at all (since that 15% or even 50% surcharge is generally still a lot less than the cost of treatment for lung cancer, bronchitis or emphysema). In other words, the surcharge itself ironically worsens the risk pool since it eliminates the "lighter" smokers while still pulling in the heavier smokers who effectively treat the surcharge as a "permission slip" to smoke as much as they want to.

As it happens, while the ACA itself currently allows up to a 50% smoking surcharge, there are a dozen states which either restrict it to less than 50% or which don't allow any tobacco surcharge at all...some of which may be surprising:

  • Arkansas: 20% surcharge allowed
  • California: no surcharge allowed
  • Colorado: 15% surchare allowed
  • District of Columbia: no surcharge allowed
  • Kentucky: 40% surcharge allowed
  • Maine: no surcharge allowed
  • Massachusetts: no surcharge allowed
  • New Jersey: no surcharge allowed
  • New Mexico: no surcharge allowed (individual market only)
  • New York: no surcharge allowed
  • Rhode Island: no surcharge allowed
  • Vermont: 1% surcharge allowed
  • Virginia: no surcharge allowed

In fact, Virginia's prohibition, which was in place for 2024 & 2025 before being temporarily sunsetted, was just signed into law earlier this year and goes into effect January 1st, 2027.

There's another philosophical problem here as well: Since smoking is addictive, that means it isn't really as much of a "choice" as one might think...in which case the penalty is even less justifiable.

The tobacco surcharge, while included with the best of intentions, not only completely runs against the underlying philosophy of the ACA in general, it's actually counterproductive to one of its intended goals (reducing premiums) while simultaneously backfiring on the larger goal of expanding healthcare coverage to more people.

As strange as it may sound to my own ears (I despise cigarettes with a passion), Michigan should eliminate it.

8. CONSIDER BOOSTING THE MLR THRESHOLD:

Under the Affordable Care Act, thanks to a provision included by then Senator Al Franken of Minnesota, insurance carriers are required to spend at least 80 - 85% of their premium revenue on actual medical claims: 80% for the Individual and Small Group markets; 85% for the Large Group Market.

If a carrier spends less than 80% on claims in a given year, the difference must be rebated to the policyholders, on a 3-year rolling average. This effectively limits insurance carriers to no more than a 20% (or 15% in the case of large group plans) gross margin.

This has resulted in billions of dollars being paid out to millions of ACA enrollees and small business owners since 2011. In 2025 alone, individual market carriers had to pay back nearly $1.2 billion to over 5 million enrollees (averaging around $233 apiece), along with another ~$460 million to small and large employers. This included over $10 million to ~142,000 individual market enrollees, or $77 apiece on average.

The ACA sets the 80% individual market MLR threshold as the minimum, but doesn't prohibit states from bumping it higher than that, and two states (New York and Massachusetts) actually have higher MLR thresholds: New York's is set to 82%, while in Massachusetts it's 88%. I'm proposing the Michigan legislature at least consider bumping up our state MLR so that it's 85% for all three markets (individual, small group & large group plans).

9. STRICTLY REGULATE SHORT-TERM, LIMITED DURATION PLANS:

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.

For instance:

  • are often medically underwritten – applicants with health conditions can be turned down or charged higher premiums, without limit, based on health status, gender, age, and other factors;
  • exclude coverage for pre-existing conditions – policyholders who get sick may be investigated by the insurer to determine whether the newly-diagnosed condition could be considered pre-existing and so excluded from coverage;
  • do not have to cover essential health benefits – typical short-term policies do not cover maternity care, prescription drugs, mental health care, preventive care, and other essential benefits, and may limit coverage in other ways;
  • can impose lifetime and annual limits – for example, many policies cap covered benefits at $2 million or less;
  • are not subject to cost sharing limits – some short term policies, for example, may require cost sharing in excess of $20,000 per person per policy period, compared to the ACA-required annual cap on cost sharing of $7,350 in 2018;
  • are not subject to other ACA market requirements – such as rate review or minimum medical loss ratios; for example, while ACA-compliant non-group policies are required to pay out at least 80% of premium revenue for claims and related expenses, the average loss ratio for individual market short-term medical policies in 2016 was 67%; while for the top two insurers, who together sold 80% of all short-term policies in this market, the average loss ratio was 50%.

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 issued new federal regulations re. STLDs in 2023 which pretty much brought them back in line with Obama-era restrictions...but naturally Trump 2.0 reversed that reversal. Basically, the rules on STLDs have been flip-flopping every four years for the past 3 administrations.

.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 which Congressional Republicans allowed to expire last year are ever put back in place permanently, I'd recommend following suit and eliminating them outright...but until then, I'd still recommend at least codifying the Obama/Biden-era regulations by restricting them to no more than 3 months per year, as states such as Hawaii, Maryland and others have done.

10. CRACK DOWN ON "SHARING MINISTRY" PLANS AS MUCH AS POSSIBLE.

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.

11. ESTABLISH A MARYLAND-STYLE ALL-PAYER RATE REQUIREMENT

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.

12. CONSIDER STRONGER REGULATIONS ON STEP THERAPY:

via Louise Norris again:

If a health plan uses step therapy for certain drugs, it means that a patient can be required to try a lower cost prescription drug that treats a given condition before “stepping up” to a similar-acting, but more expensive drug. The health plan won't cover the more expensive drug until the lower-cost medication has failed to treat the patient's condition. Other names for step therapy are “step protocol” and “fail first requirements.”

The good news is that step therapy helps save money for both the enrollee and the insurance carrier. The problem is that in some cases the patient will suffer through days, weeks or months of ineffective treatment before receiving a more appropriate medication. This can also cause headaches if the patient switches from one carrier to another, since the new carrier might require them to start over again even if they already tried the earlier steps under the prior plan.

Earlier this year, Democratic state Representative Mike McFall introduced a bill which would address step threrapy without eliminating it entirely:

ANSING, Mich., May 15, 2026 — Yesterday, state Rep. Mike McFall (D-Hazel Park) announced the reintroduction of critical legislation aimed at protecting Michigan patients from burdensome insurance practices known as step therapy or “fail first” protocols. The bill, House Bill 5988, seeks to ensure that patients can access the life-saving medications prescribed by their doctors without the unnecessary hurdles often mandated by insurance providers.

...The bill requires insurers to grant or deny a step therapy or “fail first” exception request within 72 hours, or 24 hours in urgent circumstances, ensuring that medical care is not delayed by administrative paperwork. Additionally, it mandates that all step therapy protocols be based on high-quality, peer-reviewed clinical practice guidelines developed by expert multidisciplinary panels, rather than purely financial considerations.

...Under the proposed law, patients would receive automatic protections and immediate exceptions if a required “fail first” drug is harmful, likely to cause injury, or if the patient is already stable on their current medication. To ensure accountability, insurers must provide clear, accessible online information regarding their exception processes and submit annual reports to the state regarding the volume and outcomes of these requests. Additionally, the bill addresses the synchronization of maintenance prescription drugs, allowing patients and pharmacists to better coordinate refills for chronic conditions to improve treatment adherence.

There are plenty of other bills which could improve things as well, of course, and I'll be happy to update this list further as appropriate, but making the changes above should dramatically improve the affordability, accessibility and general stability of healthcare coverage in Michigan for hundreds of thousands of Michiganders.

Michigan

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