Health insurers are seeking large premium increases for 2016 in Minnesota, with average jumps of more than 50 percent proposed by one of the state’s largest health plans.
The proposed rates were released by the federal government Wednesday, a few days after similar data for most other states prompted widespread talk about how medical costs are running higher than expected for many insurers.
For now, the increases are just proposals. Final numbers in Minnesota won’t come until October, and only after a regulatory review process that could knock them down.
Even so, the filings touched off a political skirmish, in part because they apply to the portion of the market that includes the state’s MNsure health exchange. Plus, the proposals suggest premium hikes could be on the horizon for more than 225,000 Minnesotans.
“The proposed rate increases from Minnesota’s health insurers are outrageous, given that our state’s health care costs have been increasing by only 3 percent,” Gov. Mark Dayton said in a statement.
Republicans said the figures are another indictment of MNsure as well as the federal Affordable Care Act, which has driven a large expansion of the market in which individuals purchase non-group coverage.
“These proposed prices are a consequence of flaws in federal policy that punish Minnesota consumers and toss aside decades of innovation in Minnesota’s health care system,” said Rep. Greg Davids, R-Preston.
The proposed rates apply primarily to the roughly 6 percent of state residents who buy individual policies. They don’t affect people covered by large employer-based insurance or government programs.
The filings also could provide a somewhat misleading picture of what the overall health insurance market will look like, since the federal website only posts information on insurers seeking increases of 10 percent or more in premiums. Particularly on the new government-run exchange marketplaces, consumers have gravitated to health plans with the lowest premiums, said Cynthia Cox, a researcher with the Kaiser Family Foundation.
“While we do have some anecdotal reports of significant premium increases on average, those aren’t necessarily representative of the choices that people will have,” Cox said.
‘Necessary but challenging’
Eagan-based Blue Cross and Blue Shield of Minnesota said it’s seeking a 54 percent average increase for policies held by about 171,000 people, and an average increase of 55 percent for policies covering another 8,000 people. The company cited losses in the individual market during 2014 as a factor.
“This was a necessary but challenging decision,” Blue Cross said in a statement. “As detailed in our filings, the data demonstrates that our portfolio of individual products will close out the year with a deficit significantly in excess of the $135 million in losses we experienced for 2014.”
Bloomington-based HealthPartners is seeking an average premium increase of about 23 percent for policies held by 51,860 people. Minneapolis-based UCare is seeking an average premium increase of 12 percent for policies held by about 10,000 people.
Summary information on the federal website didn’t say how many subscribers would be affected by proposed increases in Minnesota from PreferredOne, John Alden Life Insurance Company and Time Insurance Company.
Across all companies doing business in Minnesota, proposed increases range from 10.82 percent to 74.13 percent.
At least one firm that’s had a presence in the state’s individual market, Minnetonka-based Medica, did not have any plans listed on the federal website as seeking a premium increase of 10 percent or more.
Minnesota is not alone in seeing big proposed increases from health insurers. In his statement, Dayton noted proposed premium increases of 100 percent in Idaho, 78 percent in Arizona and 77 percent in Alaska.
A search of filings this week showed large increases proposed in Iowa, North Dakota, South Dakota and Wisconsin.
Among the Wisconsin increases, Minnetonka-based UnitedHealthcare is seeking an average 15.6 percent increase for policies covering about 4,000 people. In its filing, the insurer noted that people could have very different situations — some could see premium increases of 47.8 percent, while others cold see decreases of 20.3 percent depending on their particular policy and location.
Insurers are seeking premium increases for a variety of reasons, including the increased cost of specialty medications, said Cox of the Kaiser Family Foundation. Private and government insurers, for example, have been sounding alarms about new medications for hepatitis C that carry a sticker price of $1,000 per pill.
In 2014 and 2015, the federal health law is providing financial support to insurers who have suffered financial losses in the individual market, Cox noted, but those payments will diminish in 2016.
Even so, consumers might ultimately see many lower-priced options when full information is available, Cox said. Some states will see more competition, which could keep premiums down. Plus, the health law imposes bigger penalties next year for people who lack health insurance, Cox said, which could push more people with low health costs into the market.
Finally, there’s regulatory scrutiny of proposed rates.
In Minnesota, proposed rate increases were almost always kept confidential in the past, with information on rate filings becoming public only when final premiums were approved.
Now, the state Commerce Department is inviting public comments on the proposals through July 31.
“This is just the first step in a rigorous and thorough review of each health insurance rate request to ensure that it is justified,” Commerce Commissioner Mike Rothman said in a statement. “What the insurers propose is not necessarily what will be approved.”