Health insurance, health coverage has been going up at a multiple of the GDP and CPI for a long time. The last couple of years, two, three years, we've seen double digit increases for small businesses, companies with 50 and fewer employees. Last year, 11.2% statewide average and the filings for 2027, the rate requests finally got posted on the state database website the other day. And right now, for small employers, you're looking at an average 9.6% increase to renew your policy for 2027 for January 1 policy renewals. And yes, a little bit better from the double digit increases the last few years, but still a big increase. And, oh, by the way, this is an increase coming on as health insurance has never been more expensive. So those costs just keep climbing and climbing.
And this is a story we posted this week on crainsgrandrapids.com. It just kind of indicates that continuation of these high health care costs and high costs for health insurance that just keep going up and up and up. And that 9.6% average increase statewide, that's for the small group market.
If you're an individual who buys your own health coverage, you buy an individual policy, whether you're a sole proprietor, you're self-employed, or you're just simply buying it on your own outside of a job, you're looking at a much bigger increase. Those averages, those individual policies, the rate hikes for those are to average 14.2% for 2027. And if you want to look at kind of the individual carriers, you know, the two largest health insurers in Michigan are Blue Cross Blue Shield of Michigan and Priority Health here in Grand Rapids. Priority Health is looking at basically an 11.6% average increase for the HMO policy, and the PPO policies are looking at about a 10.7% increase. Blue Cross Blue Shield's HMO subsidiary Blue Care Network, 10.7% has been proposed and maybe a little bit of a bright spot. Blue Cross Blue Shield of Michigan for its PPO policies, only, and kind of hard to say that word, only 7% increase for 2027.
So bottom line, these large rate increases for health insurance keep going. There's a number of factors driving this. We're an aging population. We are using more care. Your hospitals and care centers are seeing higher acuity cases. People are sicker. You're seeing the high cost of especially the specialty drugs and the pharmaceutical costs keep going up. And then you've seen especially Blue Cross Blue Shield in the last couple of years has done a lot of complaining about hospital pricing. So, there's no one bad actor and this is just simply the system we have. And all these factors are coming together to just keep pushing up these health insurance costs for businesses.
Patrick Center: We're talking with Crain's Grand Rapids Business staff writer Mark Sanchez. Ottawa County has a shrinking aquifer. They've known about this for several years. The county by population is one of the fastest growing in the state. What are they looking at right now and the threat to the economy there?
Mark Sanchez: Yeah, this is an issue that needs to get handled. This first began showing up about 15 years ago. Groundwater wells for some of the subdivisions out in the Allendale area were beginning to run dry, so they had to dig their wells deeper. Farmers started reporting having saline in the water they were pulling from deep out of the ground to irrigate their crops. And so, it's been looked at and what's been basically found is the groundwater aquifer beneath areas of Ottawa County is not replenishing. It's not recharging. And I'm not going to go into the science of it because that's a hydrology and geology issue, but I look at things from a business issue and you're right. If folks can't get enough water for their business, if they put it in a facility, or the developers, you know, there's a huge need for housing out there. If they can't get enough water, that's a problem.
And yes, you have municipal water systems just like anywhere, but if you have to extend those lines a long way to that subdivision you want to build, that's a big cost that drives up the cost of housing.
So, it's an issue. And in the budget that the state legislature approved a few weeks ago, earlier this month, legislators allocated $500,000 to Ottawa County, which is going to try to look at this and do a study to figure out what exactly is happening. How can you start looking at recharging this aquifer? Now the true irony here is right next to this, one of the largest bodies of fresh water in the world, but some areas don't have enough water. And the way Joe Bush, he's Water Resources Commissioner here in Ottawa County explained it is a lot of folks think Lake Michigan feeds the aquifer. It does not. Again, a lot of hydrology and geology issues that we don't go into in the story, but it just doesn't. So that's the kind of the contrast here is right next to the big lake (Lake Michigan), but not enough water.
So, Ottawa County, it's going to expect to take bids to hire an outfit to do this study. It's going to take about two years to really give a good look at what's going on, why it's happening. And then maybe recommend what are some options for doing something about it? How do you recharge the aquifer? When I, again, when I spoke with Joe Bush last week, he's the, again, Ottawa County's Water Resources Commissioner. He talked about, you know, Western states, Arizona, New Mexico, Nevada have had this issue. They've got a shortage of water out there. We've seen stories here in the last number of weeks, months about the Colorado river that feeds so many water systems out West is drying up. So. there's got to be some water conservation, as well as when you talk about the aquifer, how do you recharge it? And he talked about perhaps some pilot projects looking at what they're doing in the West, industrial sites or organizations that use large amounts of water, instead of just when you're done with it, pumping it into surface water, recharging that water and injecting it straight down deep into the ground, into the aquifer to try to replenish that. So, there are some options and this study is going to look at them. What's the best for Ottawa County and more importantly, what's it going to cost? But you're right, Patrick, this is an issue that in time could really start affecting some economic development in the economy here.
Patrick Center: We'll go from Ottawa County a little further south, Corewell Health is making an investment.
Mark Sanchez: Yeah, Corewell Health, of course, the big health system based here in Grand Rapids as well as headquarters as well, dual headquarters over in Southfield. It's expanding, again. I did a story here the other day, Corewell's putting at least $43 million, probably more in investments down into Southwest Michigan. It's going to include a new outpatient center in Niles next to the hospital campus in Niles. They're looking at a new outpatient center, urgent care and primary care offices in South Haven. Now the urgent care there will open here real soon. And then an outpatient center down at Royalton outside of St. Joseph and then expanding some. primary care practices in Bridgman and Dowagiac.
Corewell and Corwell Health broke ground back in June on about a $10 million facility, adjacent to the South Haven Care Center, or it's a new care center actually, down in South Haven, that's going to do a walk-in clinic, urgent care and primary care.
But the bottom line, this shows that the health system, it's a big employer and large system, it's now expanding down there into the southwest part of the state even more. You know, many years ago, the old Spectrum Health before Spectrum and Beaumont merged to create CoreWell acquired the old former Lakeland Health down in St. Joe. So, this is really investing more down in that region of the state and building the market presence even more.
Patrick Center: Crain's Grand Rapids Business staff writer Mark Sanchez, thank you so much.
Mark Sanchez: Thank you, Patrick.