Health questions on the Michigan exam start with national plan design and the federal Affordable Care Act (ACA) floor, then layer on Michigan-specific rules and programs. This guide reviews how medical plans differ—HMO, PPO, EPO, POS, and indemnity—and the universal cost-sharing terms, then focuses on the Michigan overlay: mandated benefits, the historic role of Blue Cross Blue Shield of Michigan, continuation and conversion rights, Michigan Medicaid and the Healthy Michigan Plan, and the consumer-protection timelines you must know. Michigan's regulator is the Department of Insurance and Financial Services (DIFS).

The national base: types of medical plans

Most health questions begin with how a plan balances cost, choice, and network:

• Indemnity (fee-for-service) — pays a share of covered charges with broad provider choice; the insured handles deductibles, coinsurance, and may file claims. Now uncommon.
• HMO (Health Maintenance Organization) — lowest cost, network-only care, a primary care physician (PCP) and referrals to see specialists; emphasizes preventive care.
• PPO (Preferred Provider Organization) — a network of preferred providers with lower in-network cost and partial out-of-network coverage; usually no referral needed.
• EPO (Exclusive Provider Organization) — network-only like an HMO but typically without a PCP/referral requirement.
• POS (Point of Service) — a hybrid using a PCP/gatekeeper like an HMO but allowing out-of-network care like a PPO.

Common cost-sharing terms apply across all of these: premium, deductible, copay, coinsurance, and out-of-pocket maximum. Coverage is also sold as group (employer-sponsored, generally cheaper, light or no individual underwriting) versus individual (bought directly, now guaranteed-issue under the ACA).

The ACA floor (applies in Michigan)

Federal law sets the minimum every compliant major-medical plan must meet:

• Guaranteed issue — insurers cannot decline an applicant based on health.
• No health-based rating — premiums vary only by allowed factors (generally age, geography, tobacco, and family size), not health status.
• Pre-existing conditions covered — no exclusions or waiting periods for them.
• Essential health benefits (EHBs) — ten categories (e.g., hospitalization, maternity, prescription drugs, preventive care, mental health).
• Dependents to age 26 — adult children may stay on a parent's plan.
• No lifetime or annual dollar limits on essential benefits, and free in-network preventive care.

Michigan mandated benefits and BCBSM

Michigan, like every state, requires insured plans to include certain mandated benefits (categories such as autism treatment, mammography and cancer screening, maternity/newborn stays, mental health parity, and diabetes care). Treat any specific cap or age limit as the statutory figure of the time, and remember self-funded ERISA plans are generally exempt from state mandates.

Historically, Blue Cross Blue Shield of Michigan (BCBSM) held a special statutory role as a nonprofit health care corporation and the state's insurer of last resort, accepting members others might decline. Under 2013 legislation, BCBSM converted to a nonprofit mutual insurance company regulated like other carriers—worth knowing as a frequently referenced piece of Michigan history.

Continuation and conversion

When group coverage ends, federal and state rules govern what happens next:

• Federal COBRA applies to employers with 20 or more employees and allows continuation generally up to 18 months (up to 36 in certain events such as divorce or a dependent aging out). The enrollee pays the full premium plus up to a 2% admin fee.
• Small-employer continuation ("mini-COBRA"): Michigan is commonly cited as a state without a broad mini-COBRA statute for employers under the 20-employee COBRA threshold—verify current Michigan law and any length before relying on it. Where no state continuation applies, small-group employees may rely on the conversion privilege or the ACA marketplace instead.
• Conversion privilege: Michigan group health contracts have historically let an eligible person convert to an individual policy without new evidence of insurability when group coverage ends, within a set window. Distinguish continuation (keeping the same group plan temporarily) from conversion (moving to an individual policy).

Michigan Medicaid and the marketplace

• Michigan Medicaid provides coverage for low-income residents, administered by the state's health department.
• The Healthy Michigan Plan is Michigan's Medicaid expansion under the ACA, covering adults up to roughly 138% of the federal poverty level (verify the current threshold).
• ACA marketplace: Michigan uses the federal exchange platform—it has operated as a state-based marketplace using the federal platform (SBM-FP) (generally accessed via HealthCare.gov); verify the current designation.

Provisions and timelines

• Grace period — a window (commonly 31 days for group/health) to pay an overdue premium before coverage lapses.
• Free look — health policies commonly carry a ~10-day right to return the policy for a refund (verify the exact figure for the product).
• Incontestability — after a policy has been in force a set period (commonly 2 years), the insurer generally cannot contest it except for fraud or nonpayment.
• Prompt-pay — insurers must process clean claims within required timeframes and may not engage in unfair claims practices.

Key Michigan numbers to memorize

Common exam traps

• Assuming Michigan has a Cal-COBRA/PA-style mini-COBRA. It is commonly cited as having no broad state continuation law—verify and lean on conversion or COBRA.
• Mixing up continuation and conversion. Continuation keeps the group plan temporarily; conversion moves to an individual policy with no new underwriting.
• Forgetting the ACA floor. Guaranteed issue, no health rating, pre-existing covered, EHBs, and dependents to 26 all apply.
• Sending self-funded plan questions to state mandates. ERISA self-funded plans are generally exempt.
• Calling BCBSM a government program. It is a private carrier—now a nonprofit mutual, formerly the insurer of last resort.
• Asserting exact mandate caps or FPL figures. These change—describe them qualitatively or say "verify."

Quick recap

Michigan medical-plan questions start with national plan design (HMO, PPO, EPO, POS, indemnity) and universal cost-sharing terms, plus the ACA floor: guaranteed issue, no health-based rating, pre-existing conditions covered, essential health benefits, and dependents to age 26. The Michigan overlay adds mandated benefits, the historic insurer-of-last-resort role of Blue Cross Blue Shield of Michigan (now a nonprofit mutual), and continuation/conversion rules—note Michigan is commonly cited as lacking a broad mini-COBRA, so small groups lean on the conversion privilege or the marketplace (Michigan uses the federal platform). Round it out with Michigan Medicaid and the Healthy Michigan Plan expansion, and the standard timelines (grace, ~10-day free look, ~2-year incontestability, prompt-pay), all overseen by DIFS.