ST. PAUL -- Insurers on Thursday asked to raise premiums by an average of more than 50 percent for customers on Minnesota’s individual insurance market.
Massive proposed premium increases weren’t a surprise, coming on the heels of national market turmoil, the end of a federal subsidy for insurance companies and the withdrawal of a major insurer from Minnesota’s market.
These new proposed rates would affect only people who buy individual insurance plans. About 300,000 Minnesotans are in that category, of whom 70,000 buy their plan through the state-run MNsure exchange and 230,000 directly from insurers. People who get health insurance from providers or from government programs such as Medicare, Medical Assistance or MinnesotaCare won’t be directly affected.
After Blue Cross Blue Shield withdrew from the individual market over the summer, some of Minnesota’s other insurers considered following suit. In a statement, UCare senior vice president for public affairs Ghita Worcester said the insurer thought about exiting but decided instead to raise rates and pursue legislative “fixes” over the next year.
“The unfortunate reality is that our members’ medical and pharmacy needs were costlier, and medical service use was greater than when rates were set in previous years,” Worcester said.
Minnesota’s not alone in seeing high proposed rate increases. Most states around the country have experienced double-digit growth in proposed premiums this year.
Gov. Mark Dayton said he was “alarmed by the drastic increases in health insurance rates for Minnesotans in the individual market.” In a statement, he called them “reason for very serious concerns” and said he would reconvene a task force to recommend improvements to Minnesota’s health insurance market. That task force recommended a host of changes earlier this year, but the recommendations were rejected by Republicans and went nowhere in the Legislature.
Republican House Speaker Kurt Daudt contrasted the increases with what he called “broken promises” from Democrats that health care reform would lower prices.
“Once again, families who were told they would save $500 per year will instead see their health plans get more expensive,” Daudt said in a statement.
The entire Minnesota Legislature is up for re-election this November, and health insurance premium increases will likely be a major issue as Democrats and Republicans battle for control of the two chambers.
Even Republican presidential candidate Donald Trump’s campaign weighed in. Trump’s state director Mike Lukach called for a full repeal of the Affordable Care Act and criticized the amount state and local governments spent on health care for immigrants who are in the U.S. without authorization.
Not final yet
Rates announced Thursday are preliminary and must be approved by the Minnesota Department of Commerce. Final rates will be announced Sept. 30. These preliminary rates are also averages, so individuals might experience bigger or smaller changes in their rates.
The bulk of the increases run from 36 percent to 67 percent. Figures from one major insurer, Medica, were not immediately available Thursday, but a Department of Commerce spokesperson said Medica increases were around 57 percent.
Minnesota insurers also proposed huge rate increases in 2015 - and largely got them - but 2016’s are even bigger. The final rate increases last year ranged from 14 percent to 49 percent.
For some customers, federal subsidies for individuals will cancel out some or all of the premium increases. These subsidies are scaled to the cost of the plan and income but are available only for people who buy their insurance through MNsure.
Both MNsure and a trade group of health insurers are encouraging customers to shop for insurance onmnsure.org when open enrollment begins Nov. 1.
In a statement, Commerce Commissioner Mike Rothman said his office “has worked hard to stabilize the individual insurance market and thoroughly review each company’s rate request.”
Insurers must justify any rate increases based on a cost-benefit analysis.
The Department of Commerce is accepting public comment on the rates firstname.lastname@example.org.
Politicians and groups across the spectrum criticized Thursday’s announcement of high proposed rate increases. Republicans in particular pounced on the news to criticize the federal Affordable Care Act and Minnesota’s state-run health insurance exchange, MNsure, which covers about a quarter of Minnesota’s individual market.
House DFL Leader Paul Thissen: “Anyone who claims that these rate increases are the fault of MNSure is only demonstrating they have no ideas about how to fix the problem.”
Senate GOP Leader David Hann: “Today, the Senate DFL majority remains indifferent to the pain their ‘reform’ has caused, and offer no solutions.”
2nd Congressional District GOP candidate Jason Lewis: “For years, on the radio and off, I have always stood firmly against Obamacare, because we need health care reforms that will give Minnesotans choices - not exchanges like MNsure that take more money out of the pockets of hardworking Minnesotans.”
8th Congressional District GOP candidate Stewart Mills: “Congressman (Rick) Nolan is doubling down on his support for Obamacare as a good first step to a government-run single-payer system.”
GOP state Rep. Matt Dean: “Call a special session to enact legislation to provide immediate relief to policy holders by stabilizing the individual market.”
Mike Lukach, Minnesota State Director for Donald Trump for President: “Today’s news of skyrocketing premiums for thousands of Minnesotans is one more reason to bring Republican change to the White House and repeal and replace Obamacare permanently.”
Minnesota Jobs Coalition: “It’s past time to scrap Minnesota’s failed Obamacare scheme where families pay more and get less.”
TakeAction Minnesota, Minnesota Nurses Association & the Land Stewardship Project: “These ‘nonprofit’ insurance companies are in it for the money, not to provide Minnesotans with quality medical care at prices that are affordable for individuals and businesses.”