Dayton won't grant extension of existing health insurance plans

  • Article by: JACKIE CROSBY , Star Tribune
  • Updated: November 19, 2013 - 5:53 AM

Insurers had protested that changes offered by President Obama would be disruptive.

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MNsure, Minnesota's health insurance exchange.

Photo: Tom Wallace, Star Tribune

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Gov. Mark Dayton said Monday that he’s decided against giving Minnesotans who buy insurance on their own the option to keep their existing health plans another year.

Dayton said a letter from the state’s largest insurance companies convinced him that allowing some people that flexibility, as proposed by President Obama last week, would create too much confusion in the marketplace and could lead to ­premium increases.

“Your letter makes clear that ­making the program changes offered by the president last week would be unworkable for your members and would likely cause more expensive health coverage for Minnesotans,” the governor said in response to the letter.

Under fire over the rollout of the federal health law, Obama gave states the discretion to decide whether to allow some individuals to be grand­fathered in on their current policies for a year even if the plans don’t ­comply with the law.

Though Dayton initially applauded Obama’s plan, he weighed the insurers’ arguments and said he would ask Commerce Commissioner Mike Rothman to continue implementing the Affordable Care Act and the state’s health insurance exchange, MNsure, as it is ­presently designed.

The Minnesota Council of Health Plans, an industry group that represents Minnesota’s largest insurance companies, outlined “serious concerns” about the president’s plan in a five-page letter to Rothman delivered Monday.

The group represents seven insurers across the state, including Twin Cities-based Blue Cross and Blue Shield of Minnesota, HealthPartners, Medica, PreferredOne and UCare.

“The President’s announcement comes too late to allow health plans and our regulator to complete filings, rate approvals and communications regarding re-enrollments in time to prevent major market disruptions for Minnesotans in the individual marketplace,” Executive Director Julie Brunner wrote.

Critics were quick to accuse Dayton of flip-flopping.

“It’s dizzying keeping up with Mark Dayton’s position on Obama­care,” said Ben Golnik, chairman of the Minnesota Jobs Coalition. “After insisting he’s ‘all in’ on bringing Obamacare to Minnesota, Dayton criticized President Obama last week for breaking his promise to let the 2 million plus Americans keep their insurance if they liked it. With today’s announcement, it appears Dayton is back to his initial position of full-throated support of ­Obamacare.”

Minnesota is among the first states to reject the president’s fix. At least four others, Rhode Island, Vermont, Arkansas and Washington, also have decided to stay the course.

About 140,000 Min­ne­so­tans have plans that fall short of the health law’s re­quire­ments. Unlike some other states, Minnesota didn’t officially cancel existing plans because it has what’s known as “guaranteed renewability.” But insurance carriers did send out letters alerting consumers of ­upcoming changes.

Starting in 2014 under Obamacare, in­sur­ers no long­er will be able to deny adults cov­er­age for pre-ex­ist­ing con­di­tions, and will have to cov­er a long list of bas­ic health care needs, such as childbirth, ­men­tal health care and pre­scrip­tion drugs.

Most existing poli­cies don’t even meet the re­quire­ments of the new “bronze level” plan of­fered on the law’s in­sur­ance ex­chang­es. Bronze plans of­fer the low­est pre­miums and ­high­est out-of-pock­et costs.

The insurers’ biggest concern surrounded the impact on the new insurance marketplace. Current insurance products were built and priced assuming that young, heal­thy peo­ple would be part of the insurance pool.

That would spread the risk of covering those with higher medical needs. But if younger, healthier people de­cided to hang onto their cur­rent plans instead, it would lead to soaring premiums next year, the insurers warned.

Brunner said she and the health insurers applauded ­Dayton’s swift response.

“Making changes at this time simply would have been too disruptive to the ­market, both for today and for the future,” she said. “Moving ­forward with the planned, ­strategic implementation of health care reform is the best course for Minnesota’s ­marketplace.”

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