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MN enacts enrollment cap as premiums rise 50-67%

Minnesotans who buy health insurance from the state’s exchange, MNSure, will see some of the nation’s highest premium increases. Rates will rise 50 to 67 percent for an estimated 250,000 Minnesotans who enroll through MNSure. While some will qualify for tax subsidies, others will pay full ticket price.

This is the second year in a row The North Star State has experienced double-digit hikes for individual plans, prompting Commerce Commissioner Mike Rothman to call the rising rates “unsustainable and unfair,” and “a real emergency situation.”

To prevent a market collapse, the Minnesota Department of Commerce in October reached an agreement with five insurers to cap enrollment numbers. Once a cap has been reached, consumers will no longer be able to obtain coverage through that carrier.

Gov. Mark Dayton and GOP House Speaker Kurt Daudt have discussed how to relieve consumers but not yet come to an agreement. Dayton has promised a special session “very shortly after the election.”

Yet, Obamacare has helped Minnesotans pay for medical care, and Minnesota hospitals have seen their charity care costs decline by about 17 percent since ACA implementation. The Minnesota Department of Health in October reported uncompensated care fell from $305 million to $268 million in 2015.

Minnesota health ratings

Minnesota consistently ranks near the top of health surveys. In fact, the state tied with Vermont for #1 on the Commonwealth Fund’s Scorecard on State Health System Performance 2015. The annual report includes all 50 states and the District of Columbia. Minnesota earned its highest marks in the Access and Healthy Lives categories. The North Star State has one of the nation’s lowest uninsured rates (8 percent of adults and 4 percent of children)—only four states placed ahead of it for percentage uninsured.

Furthermore, fewer than 10 percent of Minnesota adults went without care because of cost in the past year—nationally, the average is 16 percent. As such, it may come as a surprise that the state ranked 45th for the number of children with a medical and dental preventive care visit in the past year (60 percent). The state’s individual scorecard provides additional details on Minnesota’s health system.

Minnesota placed fourth in the 2015 edition of America’s Health Rankings – a two-spot improvement from 2014. Again, its low percentage of uninsured contributed to the state’s top-five finish. The state’s lowest marks were related to excessive drinking, rates of binge drinking and public health funding.

Trust for America’s Health also provides a wealth of public health information for the 50 states. See Key Health Data About Minnesota for 2016.

To obtain more localized information about public health and access to care in this state, refer to the county-by-county health rankings for Minnesota from the Robert Wood Johnson Foundation and the Population Health Institute at the University of Wisconsin. These rankings show a range of 6 to 16 percent uninsured statewide.

Has Obamacare Helped Minnesotans?

Minnesota has enjoyed a low uninsured rate for years due to generous Medicaid eligibility standards and MinnesotaCare, a health insurance program for uninsured, working residents.

According to a study commissioned by MNsure, the state marketplace, and conducted by the University of Minnesota’s State Health Access Data Assistance Center, Minnesota’s uninsured rate was 8.2 percent just before ACA open enrollment began.

Under the Affordable Care Act, Minnesota not only expanded Medicaid, it also created a state-based health insurance exchange called MNsure.

Near the end of 2015, Minnesota was among only nine states with uninsured rates below 7 percent (5.8 percent). The national uninsured rate was 11.7 percent. According to MNsure, the highest percentage of Minnesotans in state history had health coverage as of May 2014, just after the first Obamacare open enrollment period.

2017 Minnesota health insurance rates, carriers

Perhaps the biggest change to MNsure, Minnesota’s health insurance exchange, for 2017 open enrollment will be the absence of BCBS of Minnesota’s PPO plans. BCBS of MN will no longer offer PPOs through MNsure or away from the exchange. The company, like others nationwide, has cited significant financial losses as its reason.

Four carriers will offer plans through MNsure in 2017 and received approval for the following average rate increases:

  • Blue Plus: 55 percent
  • Health Partners: 50 percent
  • Medica: 57.5 percent
  • UCare: 66.8 percent

While the nationwide increase averages 25 percent, Minnesotans will see rate increases exceeding 50 percent. While subsidies will help some reduce what they pay for coverage, those who are not eligible will notice costs rise substantially.

Minnesotans’ enrollment in qualified health plans

As reported by the Kaiser Family Foundation, 48,495 Minnesotans enrolled in qualified health plans (QHPs) through MNsure during 2014 open enrollment. QHP enrollment continued to grow through special enrollment periods, reaching 54,060 according to MNsure’s Aug. 27, 2014, enrollment update.

In its first two years, MNsure experienced technology problems that likely impacted enrollment numbers. Those problems seemed to be resolved for 2016 open enrollment, and the exchange reported an increased call volume and decreased wait times.

During 2016 open enrollment, however, the state reached and exceeded its enrollment goal of 83,000 people. By January 31, 2016, there were 85,390 private plan enrollments. Forty-five percent of MNsure’s private plan enrollees were new to the exchange this year—the highest percentage nationwide. MNsure CEO Allison O’Toole credited the MNsure’s certified navigators and brokers as a big reason enrollment grew.

The Affordable Care Act in the North Star State

In the 2010 passage of the Affordable Care Act, Minnesota’s two Democratic senators – Amy Klobuchar and Al Franken – both voted in support of health reform. Franken is credited for the inclusion of a medical loss ratio (MLR) requirement in the reform bill.

One of the early, popular provisions of the ACA, MLR requires insurance companies to issue refunds if they spend more than 20 percent of premiums on administrative items (15 percent for large-group plans). The MLR rule resulted in $1.1 billion in refunds in 2012, though payouts in subsequent years have been much less.

Minnesota’s eight representatives split their votes, with Democrat Collin Peterson joining three Republicans in voting no. However, Peterson has not joined Republicans in their many subsequent votes for full repeal of the ACA. Rep. Michelle Bachman railed against the ACA and made its repeal a key theme of her failed 2012 presidential campaign.

Minnesota Gov. Mark Dayton was a proponent of the Affordable Care Act. After state Democrats gained control of both the state House and Senate in the 2012, legislation was passed to implement a state-run health insurance exchange. Minnesota also expanded Medicaid, which it calls Medical Assistance, to residents with household incomes up to 138 percent of the federal poverty level. Medicaid expansion was a key ACA strategy to reduce the uninsured rate.

Minnesota Medicaid/CHIP enrollment

Minnesota is among the states that expanded Medicaid under the Affordable Care Act. Between October 2013 and June 2014, just more than 137,000 Minnesotans enrolled in Medicaid, which this state calls Medical Assistance. From before ACA expansion to June 2016, Minnesota’s average monthly Medicaid enrollment grew by 154,869 – an 18 percent increase.

In addition to Medical Assistance, Minnesota offers a variety of subsidized health insurance programs including MinnesotaCare and the Children’s Health Insurance Program (CHIP). Learn about Minnesota Health Care Programs and eligibility criteria.

Does Minnesota have a high-risk pool?

Before the ACA reformed the individual health insurance market, coverage was underwritten in nearly every state, including Minnesota. As a result, people with pre-existing conditions were often unable to purchase coverage in the private market, or if coverage was available it came with a higher premium or with pre-existing condition exclusion riders.

The Minnesota Comprehensive Health Association (MCHA) was created in 1976 to give people an alternative if they were ineligible to purchase individual health insurance because of their medical history. (Only Connecticut has a risk pool as old as Minnesota.)

Under the ACA, all new health insurance policies became guaranteed issue starting on January 1, 2014. This change largely eliminated the need for high-risk pools and MCHA stopped enrolling new members as of December 31, 2013. It remained operational for existing members until the end of 2014.

MN Medicare

In 2015, there were 912,285 Minnesota Medicare enrollees, about 17 percent of its total population and the same percentage of the overall U.S. population enrolled in Medicare.

About 86 percent of Minnesotans qualify for Medicare based on age alone. Remaining Minnesota Medicare enrollees are eligible as the result of a disability.

According to 2014 data, Medicare paid about $7,721 annually per enrollee in Minnesota. In 2009, Minnesota ranked 25th in total Medicare spending with $6.9 million.

Minnesotans can choose Medicare Advantage plans instead of Original Medicare if they wish to obtain additional benefits. Fifty-three percent of all Minnesota Medicare recipients chose a Medicare Advantage plan in 2015. About 31 percent of Medicare recipients nationwide select a Medicare Advantage plan.

Medicare enrollees can also opt for Medicare prescription drug coverage known as Medicare Part D. In Minnesota, 43 percent

State-based health reform legislation

Here’s a summary of recent Minnesota bills related to healthcare reform – all were introduced during the 2015 legislative session:

  • SF187 would have increased MNsure’s board of directors from 7 to 9 and required that an insurance carrier representative held at least one seat and a producer (i.e., an agent or broker) held another. This measure did not advance to a vote.
  • SF139 would have dissolved the board and restructured MNsure as a state agency. This measure did not advance to a vote.
  • HR5 would have allowed consumers to receive subsidies when they shopped for off-exchange coverage. This measure did not advance to a vote.
  • Though not a bill, in March 2015, Gov. Mark Dayton asked the legislature to create a Task Force on Health Care Financing. Although Dayton is a MNsure supporter, the task force would study MNsure and possible alternatives. His budget devoted half a million dollars to the task force, and a spending bill was approved by the legislature in May 2015. The task force made its recommendations in January 2016, and transitioning MNsure to the federal enrollment plat form was not among them. No immediate changes are likely to be made

Other state-based health reform legislation: