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Health plans you buy on your own or through MNsure might get a lot pricier

Health insurance you buy privately or through MNsure is likely going to cost more (again). And people aren’t super happy about it.

On Thursday, the Minnesota Department of Commerce put out its projections of how much these individual health plans are going to cost for someone in the state compared to last year.

All of the eight companies that offer individual insurance will, on average, be more expensive. Some significantly so. Here’s a look at the average increase for each insurer.

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(Photo: Minnesota Department of Commerce)

Leading the way is Blue Cross and Blue Shield of Minnesota – their health plan rates will go up by an average of 49 percent. At the bottom is Medical Health Plans of Wisconsin, whose rates will jump an average of 14.2 percent.

The federal health care website actually lets you search for which rate increases have been requested, and for which plans. It also includes a description of why the company is asking for a price change.

Wait, so does this mean I’ll be paying more?

Possibly, but this won’t affect most people.

The probable hikes will apply to anyone that buys individual/family health plans through Minnesota’s insurance exchange, MNsure, as well as those who buy directly from insurance companies/brokers.

According to the Department of Commerce, that is about 5.5 percent of people in Minnesota – almost everyone else gets insurance through their job, or a public assistance program such as Medicare. If that’s you, then this doesn’t affect your rates directly.

Even if you are one of the people buying an individual plan privately, it’s not a guarantee your insurance rate will go up, nor does it mean your rate will definitely go up by the amount above. Those are just the average changes for the different insurance companies.

And you probably won’t pay that much

There’s also a good chance that, even if your rate does go up, you won’t actually have to pay more.

If you buy your plan through MNsure (rather than directly from an insurance company), you’re eligible to receive tax credits that can significantly cut down the cost – these tax credits aren’t available anywhere else, as MNsure is keen to remind people.

People who are eligible (see a chart here) can choose to get the credit in advance, which makes the monthly insurance premium cheaper; or apply it all at once when filing for a federal tax return, the MNsure website explains.

MNsure says two out of every three people who have a health plan through the exchange get a tax credit – though there are thousands more people who could qualify, but purchased a plan elsewhere.

Why are the rates going up?

The Department of Commerce gets into this a little bit, and you can also see the insurers’ reasons on that federal search site.

A couple of the reasons are more obvious, and have been mentioned before. One, more people than expected who are less-healthy/need more care signed up – pushing up insurers’ costs. And two, more high-cost specialty drugs were prescribed than anticipated.

But the Department of Commerce has another point.

Minnesota’s uninsured rate has generally been one of the lowest in the country, with most recent figures putting it at 5.9 percent. That’s actually hurting insurers, since the insurance business is about spreading risk. Less people buying individual plans means a smaller pool of people – not as many healthy, low-cost customers to offset the expensive ones.

All of these new rates by the way will have been vetted and approved by the Commerce Department, which goes through the requests to make sure they’re justified.

Something needs to change, governor says

The insurance premiums spiked last year too, and it’s to the point people are now calling for fixes.

Gov. Mark Dayton in a statement said he’s “alarmed” by the insurance rates, though said it’s a relief the tax credits are available.

“Nevertheless, these increases are reason for very serious concerns and for improvements to the Affordable Care Act by both Congress and the Minnesota Legislature,” he said. He’ll also ask a task force to look for more solutions, and said he’s appreciative of the insurers who are staying in the market.

The Commerce Department in its explanation of the new rates has a whole section called “Need for Reform.” It says the state needs to consider some new measures to keep the rates from continuing to jump.

That could be a reinsurance program, risk adjustment mechanisms, new policies to promote transparency and competition, and possibly capping the insurance companies’ financial reserves or profits.

These rates will go into effect on Jan. 1, 2017. MNsure open enrollment starts again on Nov. 1, and lasts through Jan. 31, 2017.

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