MINNEAPOLIS — The federal government on Thursday posted steep proposed health insurance rate increases averaging 36 percent to 66 percent for policies sold to individual Minnesota residents, including consumers who buy coverage on the state-run MNsure exchange. The federal Affordable Care Act requires most individuals to have health insurance or pay penalties. About 5 percent of Minnesotans meet that obligation in the individual marketplace. Here’s a look at the proposed increases for 2017 and the implications:
Minnesota health insurers are proposing rate increases of up to 66 percent for most policies sold to individuals for 2017.
Seven carriers filed rates for 2017. The number of insurers offering individual policies is down from eight last year because Blue Cross Blue Shield is pulling out of the individual market, except for its Blue Plus HMO plans.
The increases range from 36 percent for some Blue Plus plans to 66 percent for UCare and certain other Blue Plus plans. While PreferredOne proposes average increases of 63 percent, it says premiums for certain products could reach 100 percent.
NOT A SURPRISE
The steep increases were expected because the costs of providing health care to patients who buy their policies on the individual market in Minnesota and other states have outstripped the premiums they pay. A major reason is that patients who buy individual policies tend to be sicker than average. Other factors include high costs for prescription drugs, the expiration of a federal subsidy to hold down premiums and declining competition. Blue Cross Blue Shield’s withdrawal will force 100,000 customers to shop for new plans.
Roughly 300,000 state residents get their insurance on the individual market, or about 5 percent of all Minnesotans. That includes self-employed people and residents who don’t get their coverage from plans offered by employers. Only about a fourth of them buy their policies on MNsure. People who get their insurance through their employers — or who are in the government-run Medicare, Medicaid or MinnesotaCare programs — aren’t affected.
THE INCREASES AREN’T SET IN STONE
The Minnesota Department of Commerce must approve the rate increases, and it can roll them back if it finds they’re not justified. The final rates will be announced Sept. 30. Open enrollment for 2017 begins Nov. 1.
Democratic Gov. Mark Dayton said he was “alarmed.” But he added that Minnesota has the lowest rate of uninsured residents in the country thanks to the Affordable Care Act. And he said anyone who thinks the country would be better off without it is “seriously mistaken.”
But Republican House Speaker Kurt Daudt called the increases another reminder of “broken promises” from Democrats that Minnesotans would save money under the Obama administration’s health care overhaul and MNsure.
BLUNTING THE IMPACT
MNsure says it can help soften the blow. As many as 107,000 state residents are eligible for federal tax credits to subsidize their insurance costs but aren’t taking advantage of them because they didn’t buy their coverage on MNsure. The tax credits are available to Minnesotans only via MNsure.
The U.S. Department of Health and Human Services has said people enrolled through exchanges will largely be shielded from big rate hikes because they’ll be eligible for higher tax credits. The subsidies are offered on a sliding scale. The income limits to qualify for subsidies will be $47,520 for individuals and $97,200 for families of four.
MNsure’s website allows side-by-side comparison shopping. The exchange also has certified brokers and navigators statewide who can provide free, in-person help to consumers who are looking to control their costs.
The proposed rates are available at: https://ratereview.healthcare.gov