Updated:
Original:

MN's health plan price hikes are big – but tax credits cut them in half, group says

Author:

Tax credits will likely soften the blow of price hikes for people who buy their own health insurance – but Minnesota will still see some of the highest increases in the country.

The Minnesota Department of Commerce revealed last week that people who buy individual or family health plans via MNsure or directly from insurers will see their premiums rise, on average, between 14 and 49 percent next year.

This means the approximately 6 percent of Minnesotans who buy their insurance this way could have to fork out hundreds more dollars for their coverage in 2016.

The Kaiser Family Foundation has compared the 13 states that have so far revealed their 2016 rates for health plans available under the Affordable Care Act, and found Minnesota will see the highest increase in rates, averaging 28.5 percent compared to a 4.4 percent average rise across all 13 states.

However, the impact is mitigated because of tax credits available to low-income households (who are predominantly those who buy their insurance from MNsure), which will reduce the average rise to 13.7 percent, the study found.

The Kaiser Foundation says the health plan hikes in Minnesota will see the average cost of a "silver plan" (the second-lowest cost available) for a 40-year-old non-smoker, earning $30,000 and living in Minneapolis, rise from $183 to $235 a month – costing them $624 extra each year.

However, more people will qualify for tax credits as a result of the rise, and according to Kaiser research this would bring the average price of the same health plan down to $208-a-month – a saving of $300 for the year.

MNsure said "more people than ever" in Minnesota will qualify for tax credits as a result of the rise, and that in some instances people will be paying less than they are this year.

Why are rates going up so much?

After announcing the rate hikes, Minnesota Commerce Commissioner Mike Rothman said the state would still have some of the cheapest individual health insurance rates in the country.

This may be a reason why costs are rising, with Dan McLaughlin, director of the University of St. Thomas' Center for Health and Medical Affairs, telling WCCO that last year's rates were too low.

"It doesn’t really surprise me too much, because when we first started the health insurance exchanges we had the lowest rates in the country," he told the news station.

Another reason they are rising, which Rothman raised last week, is plan providers have miscalculated the health levels among those buying plans via MNsure or directly from insurers. They have turned out to be "sicker" and "more expensive" than they anticipated.

The rate hikes led Republican House Leader Kurt Daudt to call for the abolition of MNsure, and for it to be replaced by the federal health exchange, Healthcare.gov.

But McLaughlin told WCCO that he doesn't expect this would reduce premiums for any Minnesotans, and would also mean the state has "Uncle Sam looking over your shoulder all the time."

Next Up

Jose Berrios

Berríos leads Blue Jays in first start against Twins

Berríos got the win on Sunday but could the Twins win the deal down the road?

motorcycle

Crash in southern Minnesota kills motorcyclist

The crash happened Saturday at Highway 42 and County Road 14 in Highland Township.

Oli Udoh

Vikings-Cardinals: 5 things you can count on happening

The Vikings need a win in the desert but will they get one on Sunday?

Kyler Murray

How can the Vikings stop Kyler Murray?

The Cardinals quarterback accounted for five touchdowns against the Titans.

Red's Pizza in Oshkosh, Wisconsin

'Landmark' Wisconsin pizza joint to close amid worker shortage

The restaurant has been a local favorite since 1957.

Ky Thomas

Potts, Gopher defense dominate Buffaloes

Trey Potts ran for three touchdowns in a 30-0 victory in Boulder.

police tape, crime scene

Suspect dies by suicide after 11 hour standoff in Wisconsin motel

The standoff occurred at a motel in Balsam Lake.

U.S. district court minnesota - federal court

Four sentenced for home invasion on northern Minnesota reservation

The incident took place in October 2019 on the Red Lake Indian Reservation.

Screen Shot 2021-09-17 at 10.42.39 AM

4-year-old girl killed by falling branch in Mankato is identified

She is from South Dakota, and was attending the Mahkato Annual Traditional Powwow.

Related

DFL says plan would cut taxes for families, raise them for corporations

The tax plan is likely to be opposed by Republicans in the Senate.