The company touted for helping MNSure offer some of the lowest health insurance premiums in the country in 2014 is reporting massive financial losses.
Golden Valley-based PreferredOne reports it lost $139 million in the individual market last year, according to the Star Tribune. (“Individual market” refers to health insurance bought directly by individuals outside of employer groups, according to NPR and Kaiser Health News.)
The paper says PreferredOne went from covering 14,000 individual policies in 2013, to 83,000 the next year.
How did more sign-ups lead to losing money?
The company told the Star Tribune it thinks it covered a large number of high-risk people who were previously unable to get insurance, and the claims that came with those customers weren't worth the risk.
PreferredOne made headlines when it pulled out of the health insurance exchange despite having been its largest carrier, accounting for nearly 60 percent of the plans purchased through MNsure. The company cited administrative costs associated with covering the plans as one of its reasons for exiting, according to the Minneapolis / St. Paul Business Journal.
Now, Blue Cross Blue Shield seems to be filling the vacuum left by PreferredOne. According to a Pioneer Press blog, the company – along with a related carrier, Blue Plus – is now MNSure’s largest carrier, making up more than half of its business.