Medica has hit its enrollment cap for 2017 in the individual health insurance market, regulators said Friday, and will no longer sell to new customers — a development that could make it tough for some patients to keep seeing their doctors.
State regulators approved caps as an emergency measure to limit losses and keep Medica and other health insurers competing in the individual market, which regulators say was on the brink of collapse this summer.
Current enrollees still have the right to renew their coverage, but the loss of Medica for others leaves just one health plan option in 62 counties across western and southern Minnesota, said Heidi Mathson, past president of the Minnesota Association of Health Underwriters, a trade group for health insurance agents.
That remaining health plan option, Mathson added, won’t include all doctors.
“I believe this should be of great concern to those consumers,” Mathson said.
The move applies only to the individual insurance market, where about 250,000 state residents buy coverage. It’s the market for people who are self-employed or don’t get health insurance from their employer. There is no impact on people with health insurance through employer-based plans or government programs like Medicare.
The individual market is undergoing a fundamental transformation under the federal Affordable Care Act. Previously, health insurers were allowed to deny coverage to people with preexisting health conditions to lower costs.
The health law in 2014 started requiring insurers to offer all shoppers coverage. Since then, health plans have struggled to make the business profitable, prompting several carriers across the country to pull back from the market.
This has included a retreat from new government-run health exchanges like Minnesota’s MNsure exchange.
The online marketplaces are an option for individual market consumers.
In September, the state Commerce Department approved enrollment caps for four of the five health insurance companies that sell coverage in the individual market. Caps are an emergency measure, Commerce says, that helps insurers prevent further financial losses.
“Individual health plans from Medica are no longer available for purchase by new customers, either on or off the MNsure exchange,” the department said in a Friday statement. “The Medica enrollment limit does not affect current Medica customers who want to renew their coverage for 2017.”
HealthPartners and UCare haven’t yet hit their enrollment caps. PreferredOne isn’t enrolling new customers within its enrollment cap.
Only Blue Plus — the HMO from Blue Cross and Blue Shield of Minnesota — doesn’t have an enrollment cap for 2017, which means policies from the insurer are serving as the backup option across most of the state.
Disruptions in the individual market for 2017 started this summer, when Blue Cross announced it would stop selling policies that currently cover about 103,000 people.
Patients and lawmakers have complained that the Blue Plus network includes a fairly limited roster of doctors and hospitals, much like most health plans in next year’s individual market.
Patients can still visit doctors and hospitals as out-of-network providers, but they would pay much more in out-of-pocket costs — sums that could be prohibitively expensive.
In the Rochester area, that means there’s no plan that allows for in-network access to Olmsted Medical Center, said Michael Pagelkopf, an insurance agent in the area.
Mathson of the trade group for insurance agents said she didn’t know how many people would have network problems due to the loss of Medica.
But she commented: “Many consumers will lose their doctors — or pay high out-of-network coinsurance, with no cap on expenses.”
Defenders say narrow network plans can better coordinate care for quality and efficiency.
Beyond the enrollment caps and network limits, all carriers in the individual market are boosting premiums by an average of at least 50 percent. In response, DFL Gov. Mark Dayton has proposed calling a special session of the Legislature to provide rebates to those shoppers who don’t qualify for tax credits through MNsure.
There’s growing support for broader policy changes, as well, that might stabilize the market.
“Limiting the number of new people who can buy health insurance on their own from Medica and other companies ... is evidence that our state’s individual health insurance market is broken,” said a statement from Jim Schowalter, president of the Minnesota Council of Health Plans, a trade group for insurers. “Changes are needed next legislative session to fix the structural problems that helped generate the premium increases and enrollment caps individuals now face.”
Open enrollment in the individual market started Nov. 1 and lasts through Jan. 31. MNsure has reported a record pace of sign-ups for coverage thus far, with subscribers shopping early because of the caps.
Blue Plus is available in all Minnesota counties next year except for five in the central portion of the state. In announcing the news Friday about the cap, regulators said Medica will keep selling coverage in those counties, nonetheless.
Those shoppers won’t be able to purchase plans through the MNsure website, but must phone the MNsure call center to enroll.
“The Medica enrollment limit also does not affect anyone living in the five counties (Benton, Crow Wing, Mille Lacs, Morrison and Stearns) where the only available insurers all have enrollment limits,” Commerce said on its website. “In an agreement with the Minnesota Commerce Department, Medica will continue to accept new customers from these five counties.”