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Minnesota health insurance

The North Star State may see the nation’s highest rate hikes

The health status of residents and health insurance coverage are important factors to consider when judging overall quality of life. Here is a summary to help you get a handle on the “state of health” in Minnesota.

Minnesota health ratings

Minnesota consistently ranks near the top of health surveys. In fact, the Commonwealth Fund’s Scorecard on State Health System Performance 2014 rated Minnesota #1 among the 50 states and the District of Columbia. Minnesota also claimed the top spot in 2009. Minnesota’s Scorecard explains how the rankings are decided.

The 2014 edition of America’s Health Rankings scored Minnesota sixth among the 50 states and the District of Columbia – three spots down from third in 2013. When it comes to health, Minnesota’s strengths include low rates of drug deaths and diabetes, and few poor physical health days. Those high marks are tempered by high rates of binge drinking and pertussis along with low per capita funding for public health.

The 2014 edition of Trust for America’s Health also provides a wealth of public health information; see Key Health Data About Minnesota.

Do you want to learn about a specific area of the state? Get county-by-county health rankings for Minnesota, from the Robert Wood Johnson Foundation and the Population Health Institute at the University of Wisconsin.

Minnesota and the Affordable Care Act

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 is called Medical Assistance in the state. Medicaid expansion was a key ACA strategy to reduce the uninsured rate.

How did Obamacare help 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. Post open enrollment, the uninsured rate dropped to 4.9 percent.

A Gallup poll showed Minnesota’s uninsured rate at 9.5 percent in 2013, pre-Obamacare, and reflected a drop to 4.6 percent by mid-2015.

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.

During the 2015 open enrollment period, including special enrollment activity through Feb 21, some 59,704 Minnesotans enrolled in coverage through the state’s exchange. However, as happens in all states, some enrollees did not make their premium payments or dropped coverage. As of June 30, 2015, there were 49,066 people who remained enrolled in their MNsure plans. Of them, 54.8 percent were receiving advanced premium tax credits and 15.1 percent were receiving cost-sharing reductions.

During the past two Obamacare open enrollment periods, MNsure has made headlines in Minnesota for having technology problems. Interim CEO Allison O’Toole has promised 2016 will be better thanks to platform upgrades, an improved user experience and additional more enrollment assisters.

Five Minnesota-based carriers will offer 2016 health insurance plans through MNsure:

  • Blue Cross Blue Shield of Minnesota
  • BluePlus
  • HealthPartners
  • Medica
  • UCare

Of these carriers, Blue Cross Blue Shield of Minnesota had the highest MNsure market share (43 percent) in 2015. On average, rates for all five carriers will increase more than 10 percent for coverage effective Jan. 1, 2016. Overall, the weighted average for 2016 plans sold in Minnesota’s individual market is 41.4 percent – possibly the highest in the nation.

Minnesota Medicaid/CHIP enrollment

Minnesota is among the states that expanded Medicaid under the Affordable Care Act, which means coverage is available to adults whose household income does not exceed 133 percent of the federal poverty level. In Minnesota, Medicaid is known as Medical Assistance. Between October 2013 and June 2014, just more than 137,000 Minnesotans enrolled in Medical Assistance. Minnesota’s average monthly Medicaid enrollment increased 133,404 pre-ACA to July 2015 – 15 percent.

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.

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. The task force is expected to make its recommendations by Jan. 16, 2016.

Medicare in the state of Minnesota

In 2009, Minnesota Medicare enrollees made up about 15.3 percent of the state’s total population, compared with 16 percent of the U.S. population enrolled in Medicare. About 84 percent qualified based on age alone, and 16 percent were eligible as the result of a disability.

In Minnesota, Medicare pays about $8,941 annually per beneficiary. There are about 20 states that spend $10,000 or more. When it comes to overall spending on Medicare, Minnesota ranks 25th with $6.9 billion per year.

Minnesotans can choose Medicare Advantage plans instead of Original Medicare if they wish to obtain additional benefits. 51 percent of all Minnesota Medicare recipients chose a Medicare Advantage plan in 2014. About 30 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, 47 percent of all Medicare recipients have a stand-alone Rx plan, which is the same as the national average.