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Minnesota health insurance

MN takes the lead in implementing state-based subsidy to offset premium hikes

Minnesotans who buy health insurance from the state’s exchange, MNSure, for 2017 saw some of the nation’s highest premium increases. Rates rose 50 to 67 percent for Minnesotans who buy their own health insurance (including those who enroll through MNSure, and those who enroll outside the exchange). While some qualify for tax subsidies, others pay full price, and faced the full brunt of the rate hikes.

But in late January, Governor Dayton signed S.F.1 into law, providing 25 percent premium rebates for Minnesotans who buy their own health insurance (on or off-exchange) and aren’t eligible for ACA subsidies. Since the premium relief measure came at the very end of open enrollment, MNsure granted a one-week special enrollment period, through February 8, for residents to enroll in coverage and take advantage of the new premium rebate.

Minnesota was the first state to take an active role in alleviating premium increases via a state-funded subsidy. Colorado lawmakers are considering a similar bill in 2017. Alaska established a state-based reinsurance program in 2016, and has filed a 1332 waiver proposal in an effort to secure federal funding for the reinsurance program.

Despite the spiraling premiums over the last two years, 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, although it fell to the second place position in the 2017 Scorecard.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 (6 percent of adults and 3 percent of children in 2015).

Furthermore, only 8 percent of Minnesota adults went without care because of cost in the past year—nationally, the average is 13 percent. The state’s individual 2015 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 — and retained the fourth-place ranking in 2016. 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. Under the Affordable Care Act, Minnesota not only expanded Medicaid, it also created a state-based health insurance exchange called MNsure.

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 in the fall of 2013.

According to U.S. Census data, Minnesota’s uninsured rate fell from 8.2 percent in 2013 to 4.5 percent in 2015.

2017 Minnesota health insurance rates, carriers

Perhaps the biggest change to MNsure, Minnesota’s health insurance exchange, for 2017 was the absence of BCBS of Minnesota’s PPO plans. BCBS of MN is no longer offer PPOs through MNsure or outside the exchange (ie, directly through the insurer). The company, like others nationwide, has cited significant financial losses as its reason.

Four carriers are offering plans through MNsure in 2017 and received approval for the following average rate increases (before any ACA or state-based subsidies are applied):

  • Blue Plus: 55 percent
  • Health Partners: 50 percent
  • Medica: 57.5 percent (enrollment cap reached in November 2017, but lifted as of January 31, 2017; enrollment is available for people who experience a qualifying event that triggers a special enrollment period)
  • UCare: 66.8 percent

While the nationwide increase averaged 25 percent, Minnesotans saw rate increases exceeding 50 percent. The ACA subsidies and the new state-based premium rebates are helping to make coverage more affordable in Minnesota.

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, 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 for 2016—the highest percentage nationwide. MNsure CEO Allison O’Toole credited the MNsure’s certified navigators and brokers as a big reason enrollment grew.

For 2017, enrollment in MNsure grew to 109,974 during open enrollment. That was a 31 percent increase — the largest year-over-year percentage increase in enrollment in the country. And the exchange reported that by March 8, enrollment had grown to 121,522.

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, and by early 2016, total cumulative refunds had reached $2.4 billion.

Minnesota’s eight representatives split their votes, with Democrat Collin Peterson joining three Republicans in voting no. Peterson did not support 2017 House Republicans in their efforts to pass the American Health Care Act, but his votes on health care reform have been a mixed bag over the years. Republican Rep. Michelle Bachman (6th District) railed against the ACA and made its repeal a key theme of her failed 2012 presidential campaign. She was replaced in 2015 by fellow Republican Tom Emmer, who supported the American Health Care Act (an ACA repeal effort) in early 2017.

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 election, 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 also established a Basic Health Program (BHP) under the AHCA, and is one of only two states to do so (New York is the other). Basic Health Programs provide robust, low-premium coverage to people with income between the Medicaid eligibility threshold and 200 percent of the poverty level. In Minnesota, the Basic Health Program is known as MinnesotaCare, a program that predates the ACA but was revamped to serve as a BHP as of January 2015. New York added their BHP in 2016.

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 153,507 – an 18 percent increase.

In addition to Medical Assistance, Minnesota offers a variety of subsidized health insurance programs including MinnesotaCare (the aforementioned BHP) 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. 55 percent of all Minnesota Medicare recipients chose a Medicare Advantage plan in 2016. That’s the highest percentage in the nation; 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 of Medicare enrollees purchased a Part D plan in 2015.

State-based health reform legislation

Here’s a summary of recent (2017) Minnesota bills related to healthcare reform:

  • S.F.1 created a state-based premium assistance program to make coverage in the individual market more affordable for Minnesota residents (enacted in January 2017).
  • H.F.419 would increase the income limit for MinnesotaCare to 275 percent of the poverty level.
  • H.F.795 would require health insurance plans to cover a 12-month supply of prescription contraceptives rather than requiring quarterly refills.
  • H.F.1129 would make Minnesota a single rating area and would allow enrollees access to out-of-network referral centers.

Other state-based health reform legislation:

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