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Here's why health care premiums for MNsure and individual plans are going up

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Thousands of Minnesotans who buy their own health insurance – including those who buy through MNsure – will see the monthly premium they pay increase by up to 49 percent next year.

The Commerce Department announced on Thursday 2016 rates for eight insurance providers in Minnesota, who are hiking their premiums by anywhere from 14 percent to 49 percent, according to a news release.

The state's largest insurer, Blue Cross Blue Shield, will up its rates on average by 45-49 percent for its 179,000 private customers, the Star Tribune reports.

The hikes affect anyone that buys individual or family health plans through Minnesota's insurance exchange, MNsure, set up in the wake of the Affordable Care Act, as well as those who buy directly from insurers.

According to the Pioneer Press, this is just 6 percent of Minnesotans, with the rest mainly getting health insurance from their employers, or by qualifying for state-run programs.

The reason premiums are going up by so much, insurers say, is because Minnesota has apparently seen a "higher concentration of sicker, more expensive patients than insurance companies expected," Minnesota Commerce Commissioner Mike Rothman said in the release.

"As a result, insurers have paid out more money for medical claims than they have taken in from the premiums they charge," he added.

Some insurance companies had requested much higher rate hikes than those announced Thursday, but will have to settle for increases below 50 percent. Customers will see varying rate hikes, depending on how healthy they are.

Rothman said he still expects the state to have among the lowest health insurance rates in the country, but acknowledged that the rate hikes "show a clear need for market reforms to protect consumers."

More qualify for tax credits

One outcome of the rate hikes is that more Minnesotans on lower incomes will be eligible for tax credits to help pay for their insurance.

MNSure says around 55 percent of people currently enrolled in health plans secured through MNsure receive an "advanced premium tax credit," which cuts down the total cost, and expects this percentage to increase next year as a result of the increases.

Despite the tax credits though, Rothman conceded to MPR News that many Minnesotans won't be able to afford coverage through MNsure as a result of the hikes, and he is urging people to shop around for the best health insurance deal before signing up.

"Large insurance premium increases are unfortunate, however, MNsure offers a real solution for Minnesotans to control or eliminate these premium increases," MNsure's interim CEO Allison O'Toole said in the release. "I sincerely hope Minnesotans will not simply accept these premium increases and will instead shop and compare on MNsure to see what kind of financial help they may be able to get."

Daudt calls for MNSure abolition

The rate announcement has already drawn a response from GOP Rep. Kurt Daudt, the Speaker of the Minnesota House, who has repeated his call to scrap MNsure completely and sign on to the health insurance exchange provided by the federal government.

FOX 9 has compiled a list of the average rate hikes (so not everyone will pay this much more) for the eight companies providing individual health insurance plans in Minnesota. They are:

  • Blue Cross Blue Shield Minnesota – up to 49 percent rise.
  • Blue Plus – 45 percent.
  • PreferredOne – 39 percent.
  • HealthPartners – 32.2 percent.
  • Group Health Inc. – 31.3 percent.
  • UCare – 27.3 percent.
  • Medica Insurance – 15.6 percent.
  • Medica Health Plans of Wisconsin – 14.2 percent.

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