The average cost of health insurance will drop next year, on one condition

166,000 Minnesotans learn how their individual health plan costs could change next year.
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The cost of buying health plans through the individual market will go down next year, provided the state is allowed to enact its reinsurance program.

The five health insurers who offer plans for people who buy their insurance individually – either directly from insurers or via the MNsure health exchange – revealed their proposed average premiums for 2018 on Monday.

But they provided the Department of Commerce with two scenarios of how much costs could change: one set of rates if the state reinsurance program goes ahead, and one if it doesn't.

If reinsurance is introduced, most individual buyers will see modest falls in the cost of health plans, with some seeing a slight increase. If no reinsurance happens, the cost reductions will be smaller, and the price increases larger.

Most state residents get their health plans through their employer or public programs like Medicaid, but the proposed rates will have implications for the 166,000 Minnesotans who bought insurance from the individual market this year. 

Here's a look at what they're proposing:

While just proposals now, the state says insurers will have to provide final rates and detailed plan information no later than Oct. 2.

These are also average rates – with the Department of Commerce noting what someone actually pays could vary based on things like age and location.

What is the reinsurance program?

This past legislative session, state lawmakers passed a stop-gap measure to shore up Minnesota's individual health insurance marketplace amid uncertainty about the future of healthcare at the national level.

The reinsurance program stabilizes premiums by acting as a "financial backstop" for insurance companies, covering a portion of health plan costs in the event a person incurs "unusually high" medical bills.

It's expected to cost the state $542 million over the next two years, but is also expected to reduced premiums by over 20 percent of what it would otherwise be, the Star Tribune notes.

The problem is the state is still waiting for federal approval for the reinsurance program, so it has instructed health plan providers to propose rates for both scenarios in case it's rejected.

Commerce commissioner Mike Rothman, however, says the state has received "positive feedback" at the federal level to get approval for the program.

“We are still waiting to receive that approval and hope federal authorities decide by the end of August in order to help finalize the lower rates with reinsurance for 2018," he said.

Rates could go up for small business employees

While rates could go down for individual insurance buyers, those working for small companies could see the cost of their health plans rise next year.

Plan providers gave an indication of their proposed rates for businesses with 2-50 employees – and all but one plans to increase premiums.

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