The latest announcements regarding huge premium increases (50-67%) coupled with the reduction in access to products have raised concerns about the future of the state's individual health insurance market. Here is what we know to date.
Blue Cross announced that they will cancel 103,000 individuals and will now only write new products in their Blue Plus limited network. The Blue Plus plan will be offered in all counties except Benton, Mille Lacs, Morrison, Crow Wing, and Stearns. Their average rate increase is 55%. They will take all comers and not limit their enrollments.
Medica announced that they will only write a limited number of policies in 2017. Their limit is reported to be 50,000 and includes renewals of 43,000 existing policyholders. It appears they will write only 7,000 new policies. They will no longer pay commissions on new policies and all new policies must be written through MNsure. Renewal policies will be paid commissions. Average rate increase is 59.4%.
Health Partners has announced that they will limit policies to specific Minnesota counties. These include the seven county metropolitan area and four counties in the St. Cloud area. In 2016, Health Partners offered products in 65 counties. Their average rate increase is 50%.
Other insurers writing individual products are capping their number of enrollments. Preferred One has 1700 plans in place but will not be offering new enrollments. U-Care has limited enrollment to specific counties and capped enrollments at 30,000.
Commissioner Rothman, appearing before the Legislature's MNsure Oversight Committee, told legislators that these drastic measures where necessary to keep the individual health insurance market from collapse. The caps on enrollments were required to keep insurers in the marketplace. The Commissioner suggested individuals enroll or renew their policies almost immediately on November 1.
Meanwhile state legislators have suggested ideas to address the increased premiums. There was some discussion of special legislative session to address the situation. However, it became immediately clear that even if legislators could agree on a fix, it is too late to affect the 2017 market. And of course, there is an election and various candidates are using the situation to point out problems with the ACA.
Here are couple of ideas that have been at least kicked around. Create a reinsurance mechanism that would allow health insurers to cede risk to a reinsurance pool. This would allow them to limit their risk and thereby lower premiums. The question would be how to fund the reinsurance pool.
Would we do was we did with MCHA and assess all insurers a percentage of their premiums or could this be paid for from the state's general revenue.
Another idea is to combine the individual market with the small group market. It would be important to know how this would affect small group rates. Another proposal offered by Democrats is to expand MinnesotaCare above the current threshold of 200% of federal poverty. Republicans have called for dumping MNsure and going to the federal health insurance exchange. Neither of these would do much to lower premiums.
Other than the reinsurance mechanism, I see little agreement on a quick solution. Some have called for a special session immediately after the election. Most likely the legislature will wait until 2017 to enact changes that could improve the market.
The Agents Coalition for Health Care Reform has met with legislators and health plan executives to discuss our concerns. We will continue to do so but frankly no quick fix appears forthcoming.