The 250,000 people shopping in Minnesota's market for individual health insurance policies will find a much shorter list of options for 2017.
Bloomington-based HealthPartners said Monday that it won't sell individual market coverage for next year beyond the Twin Cities and St. Cloud regions.
Minnetonka-based Medica, meanwhile, said it will sell to new customers only through the state's MNsure health insurance exchange, meaning they won't be able to purchase directly from the carrier.
And new caps on enrollment mean it's possible that five counties in north central Minnesota could lose all options at some point, although state regulators said that's unlikely to happen.
The bottom line: Shoppers should move quickly when open enrollment begins next month, said Heidi Mathson, past president of the Minnesota Association of Health Underwriters, a trade group for health insurance agents.
"It's almost like they're running out of good choices," Mathson said. "Each year, the selection gets higher priced and more limited."
The limited choices are confined to the state's individual market, where about 5 percent of state residents buy coverage.
The changes don't affect people who receive health insurance from an employer, or a government program like Medicare, Medicaid or MinnesotaCare.
The individual market is undergoing fundamental changes with the federal Affordable Care Act, including the launch of government-run health exchanges like MNsure. But insurers selling in these markets have struggled with mounting financial losses that have prompted some to stop offering coverage, and others to hike premiums.
Last week, the Minnesota Department of Commerce announced that premiums in the individual market would jump an average of 50 percent to 67 percent, depending on the carrier. Four of five insurance companies also will cap their enrollment in the market.
The limits allow each insurer to "manage its financial or provider network capacity to absorb the large number of consumers who will be shopping for new plan," the Commerce Department said in a statement.
Currently, HealthPartners sells individual market policies in 67 counties, but is limiting its service area for next year to just seven metro counties and four counties in the St. Cloud areas.
Most of HealthPartners' current customers live in those 11 counties, said Donna Zimmerman, a senior vice president with the health plan. The insurer believes it can better manage the cost of care with the change, Zimmerman said, because HealthPartners operates a large number of clinics and hospitals in the regions.
About 9,100 current subscribers will need to pick a new plan for 2017, Zimmerman said.
It also means HealthPartners won't be an individual market option across most of the state. Previously, the insurer was an option throughout the state except in the southeast portion of Minnesota.
Within the next few weeks, insurers will be sending letters to consumers about next year's changes.
"That will probably have the most complete information about the current plan that they are in, and what that plan will look like for 2017," Zimmerman said of forthcoming letters from HealthPartners. "So, that's a place to start."
At Medica, there's no change in the service area, but new customers only will be able to buy insurance from the company via MNsure. The change should drive consumers to learn whether they qualify for federal tax credits that can significantly discount premium costs, said Dannette Coleman, a Medica senior vice president.
"We are incredibly concerned about affordability," she said.
A Minnesota Department of Health report this summer that suggested more than 100,000 state residents in the market aren't getting tax credits even though they qualify. Current subscribers will be able to renew Medica coverage via MNsure, Coleman said, or directly from the insurer.
Both Medica and HealthPartners are capping their enrollment in the individual market for 2017. Minneapolis-based UCare also has a cap on enrollees, while Golden Valley-based PreferredOne will not accept any new sign-ups in the market.
The limits make sure the plans don't struggle with a large influx of new enrollees. In June, Eagan-based Blue Cross and Blue Shield of Minnesota announced it was discontinuing coverage for about 103,000 people in the market, which is roughly 40 percent of all subscribers.
Blue Cross will continue to compete in the market via its HMO called Blue Plus. The health plan doesn't have a cap, which apparently means Blue Plus would serve as a sort of default option in many counties once other health plans hit their caps.
Blue Cross referred questions about how this might work to regulators.
"We believe enrollment caps create an unlevel playing field, while also adding confusion to an already complicated and volatile market," the insurer said Monday in a statement. "There is no precedent on how caps will work with established health insurance companies."
Blue Plus does not sell individual market coverage in five counties — Benton, Crow Wing, Mille Lacs, Morrison and Stearns — so its conceivable consumers in those counties might eventually have no options. Regulators say that scenario is unlikely.
"Commerce has discussed [this] with the insurers, and they believe there is flexibility to accommodate everyone," said Ross Corson, a Commerce Department spokesman, via e-mail. "Note that Stearns, by far the largest of the five counties, has three insurer options (as does Benton)."