Healthcare
Michigan has some of the highest healthcare inflation in the country, and consolidation is fueling it. We must crack down on hospital monopolies.
Of all the things in our country that feel broken right now, I’d argue healthcare is at the top of that list. Just this year, Michigan’s health insurance premiums have increased an average of 20.2% for individual coverage and 11.1% for small-employer coverage.¹ To put that in context, Metro Detroit’s prices have risen 3.7% over the last 12 months.² Our premiums have risen over five times as fast as inflation!
People are hurting. Many Michiganders are considering dropping health insurance altogether, effectively rolling the dice in the hopes that nothing catastrophic happens. And federal changes are making it worse on two fronts. Enhanced marketplace subsidies expired at the end of last year, resulting in Michigan marketplace enrollment already falling by 27 percent.³ Further, the One Big Beautiful Bill will cut an estimated $2.5 billion a year in Medicaid funding to Michigan providers.⁴ So, if the state can’t turn up additional revenue, hundreds of thousands of Michiganders will be at risk of being kicked off of Medicaid.
It is a failure of both government policy and market conditions that healthcare is unaffordable for most Michiganders. We can’t go on like this. It’s immoral and unsustainable. Clearly, Washington is unable or unwilling to fix the problem. That’s why we need to step up at the state level to address this crisis.
1) How Consolidation Raises Prices
Hospital systems do not merge because bigger hospitals deliver better care. They merge because bigger systems negotiate better prices for themselves.
Every year, each insurer sits down with each health system in the region and negotiates what the system will charge. When a region has a dozen independent hospitals, the insurer can walk away from any one of them. When a region has three systems, walking away from one means telling a third of your customers that their hospital is out of network. No insurer can sell that plan. So the system names its price, and the insurer passes it on to employers and families in the form of higher premiums.
Southeast Michigan has spent the past four years running this experiment. A 2022 merger of Beaumont and Spectrum created Corewell, the largest health system in the state. Then, a 2024 joint venture folded all eight Ascension hospitals (of which, all are in Metro Detroit) into Henry Ford. Health-market analyst Allan Baumgarten estimated that the second deal would leave the combined system with 43.8 percent of the Detroit-area hospital market.⁵ University of Michigan health economist Thomas Buchmueller summed up the result: “The big problem, in terms of hospital prices, is the lack of competition.”⁶
Insurers are not pocketing the difference. Michigan’s largest insurer (i.e., Blue Cross Blue Shield of Michigan) paid out $1.04 in claims for every dollar of premium it collected in 2024, posting a $1.3 billion loss.⁷ Even the health insurance companies can’t afford healthcare. The money is going to the providers, and the providers with the most market power collect the most.
2) The Contracts Behind the Prices
This type of consolidated market power would push prices up on its own. But dominant systems go further. They write clauses into their insurer contracts that shut down competition before it starts.
Suppose an independent surgical center down the street performs the same procedure for half the price. Your insurer would like to reward you for choosing it, with a lower copay or a waived deductible. An anti-steering clause forbids that. An anti-tiering clause works the same way: the insurer cannot place the system’s most expensive hospitals in a higher cost-sharing tier, no matter how much more they charge. The patient never sees a reason to shop, so the system never faces a reason to compete.
Gag clauses finish the job. Some contracts keep negotiated prices hidden from the very employers paying the bills, and no one can steer patients toward the cheaper provider without knowing which provider is cheaper. Congress prohibited gag clauses in 2021, but compliance has been uneven.⁸
The most powerful clause is all-or-nothing. A dominant system owns the region’s top trauma center and its children’s hospital, facilities no insurer can leave out of a network. So the system bundles them with everything else it owns—every community hospital, every outpatient clinic, every employed physician—and offers the insurer a choice: take all of it at our price, or take none of it.
No one loses more under this arrangement than the independent doctor. Nearly six in ten physicians nationwide now work for a hospital system.⁹ The ones who remain independent compete against those systems for the same patients. When an insurer has to take a system’s entire employed physician group, it has little reason to contract with the independent practice across the street, and little reason to pay it fairly when it does. Ban all-or-nothing clauses, and insurers can build networks around the doctors who offer the best value. That gives independent practices a way back in.
Texas shows what happens when a state stops halfway. In 2023, Texas banned anti-steering and anti-tiering clauses but dropped the all-or-nothing ban under pressure from lobbyists.¹⁰ Two years later, insurers there report that dominant systems still demand all-or-nothing terms, and the law’s supporters are working to close the loophole.¹¹ Michigan should ban all four clauses from the start, write the gag-clause ban into state law so state regulators can enforce it, and void any such clause in a contract signed or renewed after the law takes effect.
3) Who Saves
This is all a moot point for your bottom line if lower hospital prices don’t ever reach families, with insurers simply keep the savings. Luckily, the structure of the market solves this question for us. Most workers with employer coverage are in self-funded plans, where the employer pays claims directly and the insurer only administers the network. Every dollar the hospital no longer charges goes straight back to the employer and its workers. For everyone else, federal law already requires insurers to spend at least 80 percent of premiums on care in the individual and small-group markets, and 85 percent in the large-group market, or rebate the difference to customers.¹² Lower prices have to show up somewhere, and the law makes sure they show up on your side of the ledger.
4) Not a Partisan Idea
Few reforms draw support from both Texas and Connecticut. These one do. Texas passed its ban with only one dissenting vote in either chamber. Connecticut passed a broader ban the same year, covering all-or-nothing clauses as well.¹³ In June, the White House Council of Economic Advisers estimated that banning anti-steering, anti-tiering, and all-or-nothing contracts would cut hospital and physician prices by 18 percent and employer premiums by 6.5 percent in affected markets—roughly $1,755 per family per year.¹⁴ Ohio’s Attorney General joined the Justice Department this year in suing a 16-hospital system over the same contract terms, and the system settled within four months.¹⁵
Michigan Department of Insurance and Financial Services, "2026 Michigan Health Insurance Approved Rate Changes," October 28, 2025 (individual market average approved increase of 20.2%; small group 11.1%). https://www.michigan.gov/difs/-/media/Project/Websites/difs/OIRF/EHB/PDFs/2026_Approved_Rate_Changes.pdf
U.S. Bureau of Labor Statistics, "Consumer Price Index, Detroit-Warren-Dearborn area — August 2026," September 11, 2026. https://www.bls.gov/regions/midwest/news-release/2026/consumerpriceindex_detroit_20260911.htm
KFF, "How Has ACA Marketplace Enrollment Changed Across States in 2026?," July 29, 2026. https://www.kff.org/affordable-care-act/how-has-aca-marketplace-enrollment-changed-across-states-in-2026/
The Detroit News, "Michigan Medicaid program faces $15B hit as 'big beautiful bill' affects rural counties," July 10, 2025. https://eu.detroitnews.com/story/news/politics/2025/07/10/michigan-medicaid-program-faces-15-billion-hit-reduction-big-beautiful-bill-doctors-provider-tax/84495561007/
Allan Baumgarten, analysis of Michigan hospital market share (2021 Medicare cost report data), as reported in the Detroit News. https://allanbaumgarten.com/?category=6
Crain's Detroit Business, "Michigan hospitals clash with insurers over out-of-control costs," April 2025. https://www.crainsdetroit.com/health-care/what-role-do-hospitals-play-skyrocketing-health-care-costs
Blue Cross Blue Shield of Michigan, "Blue Cross Blue Shield of Michigan Reports 2024 Financial Performance," MI Blue Daily, 2025. https://bcbsm.mibluedaily.com/stories/financials/bcbsm2024financials
Georgetown University Center on Health Insurance Reforms, “State Spotlight: Texas Confronts Anti-Competitive Tactics That Drive Up Health Care Costs,” January 2026. https://chir.georgetown.edu/state-spotlight-texas-confronts-anti-competitive-tactics-that-drive-up-health-care-costs/
Physicians Advocacy Institute and Avalere Health, "Physician Employment Trends and Practice Acquisitions: 2018–2026" (59.7% of physicians employed by hospitals as of January 1, 2026). https://www.physiciansadvocacyinstitute.org/PAI-Research/PAI-Avalere-Health-Report-on-Physician-Employment-Trends-and-Practice-Acquisitions-2018-2026
Texas Senate Research Center, Bill Analysis, H.B. 711 (engrossed), May 2023. https://capitol.texas.gov/tlodocs/88R/analysis/pdf/HB00711E.pdf
Georgetown University Center on Health Insurance Reforms, "State Spotlight: Texas Confronts Anti-Competitive Tactics That Drive Up Health Care Costs," January 2026. https://chir.georgetown.edu/state-spotlight-texas-confronts-anti-competitive-tactics-that-drive-up-health-care-costs/
42 U.S.C. § 300gg-18 (medical loss ratio requirements).
Georgetown University O'Neill Institute, "Pushing Back on Anticompetitive Hospital Contracting," March 2025 (Connecticut HB 6669 covers providers, carriers, and plan administrators). https://oneill.law.georgetown.edu/pushing-back-on-anticompetitive-hospital-contracting/
White House Council of Economic Advisers, "Effects of Banning Hospitals' Anti-Steering, Anti-Tiering, and All-or-Nothing Contracts," June 2026. https://www.whitehouse.gov/wp-content/uploads/2026/06/Effects-of-Banning-Hospitals-Anti-Steering-Anti-Tiering-and-All-or-Nothing-Contracts.pdf
The Source on Healthcare Price and Competition, "DOJ and State of Ohio Announce a Settlement of Anticompetitive Contracting Case," June 2026. https://sourceonhealthcare.org/key-issue/healthcare-markets/antitrust-anticompetitive-regulation/anti-steering-anti-tiering/