Q&A: MLPP’s Alex Rossman Talks Health Insurance Affordability and the Inflation Reduction Act – State of Reform

Alex Rossman is the Director of External Affairs at the Michigan League for Public Policy (MLPP). In this Q&A, he discusses how the Inflation Reduction Act will affect the health insurance market and Michiganders.

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Status of the reform: How will the recent Whitmer directive of health insurance companies to reduce costs, under the Inflation Reduction Act, affect those companies and the health insurance market?

Alex Rossman: “Savings and more affordable coverage for consumers lead to greater engagement in the marketplace, including overall greater engagement from healthier people. This will ultimately reduce risks for insurers and create savings for the insurance company. the governor, [Michigan Department of Insurance and Financial Services], and my entire organization would like to see those savings flow back to consumers. Logistically, insurers had to plan their rates for 2023 before there was clarity on the fate of premium tax credits and whether they would be extended. When those premium tax credits were expected to end, insurers expected to have to raise prices, and so what’s on the books doesn’t have the important context of extending the premium tax credits.

IRAs and premium tax credits will have this direct impact on consumers, but it will really benefit the market and participation as a whole, and ultimately insurers as well. I think what we’re trying to do, and what the governor and the Department of Health are saying, is that both the expected benefits and the savings should go back to the consumer.

SOR: How will this provision of the Inflation Reduction Act affect Michiganders?

AR: “We have data from some of our national partners that about 271,000 state residents will benefit from the premium tax credit extension. So far in 2022, they are estimated to save consumers about $800 a year. And so there is a real direct impact on individual households and individual pocketbooks. But the overall effect the changes will have on the market is on subsidies, making getting health insurance more affordable and a more attractive option for people with lower expected health care needs. This makes health insurance more affordable and accessible to people who need it [both the most and the least], and then it benefits the pool and the company. So it really has some universal benefit.

[More affordable health insurance will benefit] people in both their fiscal health and their physical health, because when insurance is unaffordable, it causes consumers to miss checkups and standard screenings and health care services. They tend to go to emergency rooms for non-urgent care, and all of this ultimately increases costs for both hospitals and the state. So overall, making insurance coverage more affordable makes it more attractive when you’re looking at people in better health who don’t expect to need a lot of medical visits.

This leads to greater savings for the health system as a whole when people get these health checks and treat these health problems earlier.”

SOR: What other impacts will the Inflation Reduction Act have on Michiganders?

AR: “We are very excited about the passage of the Inflation Reduction Act and a number of its provisions. One aspect of our organization’s mission is advocacy for people with lower incomes. So we specifically advocate for health insurance affordability from the point of view that we don’t want anyone to be deprived of care or life-saving medication. In addition to the premium tax credits we’ve talked about, another big provision that would benefit many Michiganders and have ripple effects in the health care system is the provision that would allow Medicare to negotiate drug prices and a cap of $2,000 in out-of-pocket prescription drug costs.

Previously, Medicare was unable to use its purchasing power as a large provider to negotiate lower drug costs for seniors. Because Michigan is close to Canada, you hear a lot about people going to Canada to get their prescription drugs because of the more affordable price there. So that’s a really big, important part. Overall, this will reduce prescription drug costs for seniors, and seniors in particular are a population that has very constant drug needs… So this is a really positive opportunity for Medicare with the size and scope of coverage that provides, to use this as leverage to negotiate these prices, aiming to negotiate price caps for the 20 most expensive medicines by 2029.

Fortunately, Michigan was one of the states that very early on under the Affordable Care Act was able to find bipartisan agreement and expand Medicaid, create the Healthy Michigan plan, and we continue to see the benefits of that. But I know that at one time, during the Build Back Better discussions and even earlier conversations about the Inflation Reduction Act, there was an opportunity to have a provision to close the coverage gap related to the 2.2 million people in states, which did not expand Medicaid and essentially did so at the federal level. From an advocacy perspective and from a health policy perspective, we continue to advocate for similar actions in favor of those other countries that are not [opted to expand Medicaid yet].”

This interview has been edited for clarity and length.

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