Rates are lowest in the Twin Cities, while people in Rochester and elsewhere pay far more and find fewer choices.
Portico navigator Victoria Quiroz worked with a client on the phone, Wednesday, October 16, 2013. Portico has been working since 1995 to help low-income people get publicly funded health care through programs like Medicaid and MinnesotaCare. Fifteen Portico employees went through the certification process to navigators.
Despite the promises of choice and affordability offered by the federal health care overhaul, many Minnesotans outside the Twin Cities area aren’t seeing much of either.
In certain pockets of the state, shoppers on the new MNsure website have just a handful of insurance companies to choose from and face much higher premiums than those available in the metro area.
“I’ve got clients who are looking at paying $500 more a month than they’re currently paying,” said Rod Woxland, a broker with Minnesota Garot Christman Agency in Rochester. “They feel they’re left out of this deal. If they want coverage, they have to pay the price or drive elsewhere.”
The gap is greatest around Rochester, home of the Mayo Clinic, and surrounding counties in the southeastern corner of the state. Residents there have one or two insurance companies to choose from and face prices that are nearly double those in the Twin Cities.
People in the Arrowhead region of northeastern Minnesota, particularly outside of Duluth, also face lackluster competition. Residents have three choices of insurers and pay about a third more than the Twin Cities, where consumers can choose among all five of the state’s major carriers and enjoy the state’s lowest prices.
One thing the higher-priced areas have in common is a dominant hospital and clinic system — Mayo in the southeast and Essentia Health in the northeast.
Northern Minnesota has long trended toward higher medical costs, said University of Minnesota health economist Roger Feldman, perhaps because it is dominated by steelworkers and mine workers whose unions may have negotiated richer benefits that are both well-needed and well-used.
An aging population with more medical needs and Essentia’s market power create a difficult market. “Costs are higher up there because providers charge more,” Feldman said.
And what insurers call “the Mayo Effect” leads to a different market reality because Mayo’s world-renowned care makes it a must-have in many insurers’ networks. With such market power, Feldman said, Mayo creates a “take-it-or-leave-it” situation, particularly for those who live nearby.
Robert Coates of Rochester figured that out when he first logged onto the MNsure website. He and his wife live on his “small pension” and her monthly Social Security disability check. Tax credits will knock the premium down from $700 to $350 a month, with a high deductible, but that might still be a struggle.
“I think you will agree with me — that is neither choice nor affordable,” he said. “It’s ironic that Mayo is getting millions from the state of Minnesota, but the people who live in the county where it’s located are getting screwed when it comes to getting affordable health insurance.”
The issue of premium price and competition has reached a fever pitch inside the State Capitol in recent weeks, as legislators representing the Rochester area hear from constituents who have shopped the MNsure site.
Legislators have written letters, and regulators have been meeting with insurance executives to try to get consumers more choice.
In Olmsted and Dodge counties, for instance, residents have several options, but all are sold by a single company, Blue Cross and Blue Shield of Minnesota.
The situation arose after Medica, the other insurer offering coverage in the 10-county southeastern Minnesota region, carved out some ZIP codes around Olmsted County, which includes Rochester, and around Dodge Center when it designed its MNsure offerings.
The lack of choice is particularly stark for residents with a Rochester ZIP code. There is just one health plan offered on MNsure — a single silver-level plan from Blue Cross and Blue Shield of Minnesota. It costs a 40-year old nonsmoker $326 a month, with a $3,000 deductible. A comparable option for a Twin Cities resident would cost an average $154.