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Yep, health plans you buy on your own or through MNsure are more expensive

Earlier this month, we told you health plans you buy on your own or through MNsure might get a lot pricier. That is not longer a "might."
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Earlier this month, we told you health plans you buy on your own or through MNsure might get a lot pricier.

That is not longer a "might."

The Minnesota Department of Commerce Friday announced the rates for individuals buying health coverage (or family plans) are going up anywhere from 50 to 67 percent.

Who does this affect?

These hikes only affect people who buy individual or family health insurance plans through MNsure, through an insurance agent, or through an insurance company directly. That's about 5 percent of all Minnesotans (250,000 or so people), the department says.

If you're under 26 and on your parents' plan, or have a job that provides health insurance, this does not affect you directly.

These individual/family plans are offered by seven different insurance companies. Here is the average amount each company's plans will be going up.

Why will these plans cost more?

Health insurers, according to the department, listed a few reasons for their price jumps:

  • There are a higher number of less-healthy people buying the plans, meaning higher-than-expected costs.
  • Medical care and drug costs were much higher than insurers had planned for, most notably specialty drugs.
  • In Minnesota, only about 4.3 percent of people don't have health insurance. That's one of the lowest rates in the nation – but it also means the pool for people buying individual plans is small, and there aren't as many lower-cost healthy people to offset the higher-cost, less-healthy people.
  • And starting this year, the federal government will no longer being providing funds to insurance companies to help cover the costs of providing coverage on the individual market.

MNsure says you probably won’t actually pay much more

MNsure – the state-run exchange through which you can buy health plans – is once again reiterating that a lot of people won't actually have to pay much more out of pocket.

That's because 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, MNsure explains.

This is tied to income, so if you're an individual who makes less than $47,520 a year, you are eligible for tax credits. There are different income limits depending on how large of a household/family you live in, so view those figures here.

People who are eligible 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.

According to the exchange, two out of every three people who enroll through MNsure can get a tax credit – the average savings is $210 a month.

Nobody is happy about the hikes

So this isn't super surprising, but people aren't thrilled with the three straight years of rate increases, even ardent supporters of MNsure.

Rep. Paul Thissen, the top Democrat in the Minnesota House, said in an email news release said the rate increases "are too high. It's not fair to families.” He did quickly point out MNsure's tax credits though to keep costs low for consumers.

Republican Rep. Kurt Daudt, the speaker of the house, said in an email release the upward trend and rising costs is "creating a health care crisis for thousands of Minnesota families."

And even the Department of Commerce is noting something needs to change. In their insurance rate summary, the department says there's an "urgent need" to reform the individual market, writing in part: "The dramatic rate increases facing Minnesotans who purchase their own health insurance is unsustainable and unfair."

They also note it's part of a national trend.

Back when the forecasts were announced, Gov. Mark Dayton called the projections "alarming," and in response said he'll bring back the Task Force on Health Care Financing to go over possible solutions.

Minnesota Commerce Commissioner Mike Rothman said the market was on the verge of collapse because many insurers wanted to leave, and the department barely managed to hold it together.

A few other things to know

There is another group that is affected by the news today – small businesses (under 50 employees) that provide health coverage. It's called the Small Group Market – for those plans, rates will change anywhere from going up 18 percent, to getting 1 percent cheaper. You can find more information here.

Blue Cross and Blue Shield of Minnesota said it won't be offering plans on the individual market for 2017. There were 103,000 people with plans through them last year, so they'll all need to pick new insurers for 2017.

Open enrollment to sign up for 2017 plans starts Nov. 1, and lasts through Jan. 31 of 2017.

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