Minnesota health-plan shoppers used $137 million in state rebates

Consumers in the individual health insurance market used about $137 million worth of financial help last year, less than half the sum set aside by legislators, according to final figures for the state's one-time premium rebate program.

Minnesota Management and Budget (MMB) released numbers this week showing that 118,000 people in the individual market received rebates, with an average value of $136 per person per month.

The rebates were available only to people who buy individual coverage, a small market that primarily serves self-employed people and those who don't get coverage from their employer. The market has seen significant premium increases under the federal Affordable Care Act.

"We had a lot of unknowns with those premiums increasing 50 to 60 percent," said Myron Frans, the MMB commissioner, in an interview. "We estimated in January of 2017 that there could be as many as 300,000 people in the individual market. It turns out we serviced about 118,000."

Lawmakers created the rebate program to help stabilize the individual market, which nearly collapsed going into 2017 due to mounting financial losses for insurers. Carriers ultimately stayed in the market, but hiked premiums for 2017 and offered more plans with tighter limits on doctor and hospital choices.

In 2017, the individual market shrank by about 80,000 people, or 35 percent, to about 151,000 people, according to the Minnesota Council of Health Plans, the trade group for the state's nonprofit insurers.

Insurers as a group posted several hundred million dollars in losses in the state's individual market between 2014 and 2016, but the financial performance turned around in 2017. Carriers last year saw a combined profit on the individual business of $157 million.

This year, premiums for many in Minnesota's individual market are lower than in 2017, studies show, even though the impact has been obscured for consumers since the 25 percent rebates clicked off on Jan. 1. Premiums have moderated in part due to $271 million in state money that started going toward a "reinsurance" program this year.

Scheduled to run in 2019 as well, the program is covering costs for insurers that happen to enroll individual market consumers with unusually high medical claims.

The rebate program for 2017 provided premium relief of 25 percent to individual market enrollees who didn't receive federal subsidies via the state's MNsure health insurance exchange.

MMB figures show consumers in Hennepin County collectively received the most in rebate dollars at about $38 million. On a per-person basis, the savings were most significant in southeast Minnesota counties where individual market premiums are highest.

Whereas the per capita rebate in Hennepin County was $1,005, according to a Star Tribune analysis, the comparable figure in Houston County was $1,867.