It’s hard to imagine a more unproductive, ill-informed policy debate than the one that took place in Minnesota recently with the announcement of double-digit premium increases for those who buy private health insurance on their own.
There was palpable GOP schadenfreude and predictable calls to repeal the Affordable Care Act (ACA). There also was a renewed push to get rid of MNsure and move to the federal health insurance shopping site, a switch that would do nothing to rein in the forces driving up premiums here.
DFLers didn’t contribute much either. Gov. Mark Dayton unhelpfully issued a vague threat about insurance companies’ role in health care. The party’s lawmakers were mostly silent, with a few timidly offering up a silver lining — that the steep increases likely mean more Minnesotans will qualify for tax-credit assistance to buy insurance. More federal money chasing after skyrocketing premiums isn’t comforting. And thousands of Minnesotans will still earn too much to qualify for this aid.
Health care consumers deserve far better. The increases are unacceptable, and it’s time for a serious debate in this state about how to rein them in. Needed are policymakers willing to drill down into the mechanics of the individual market, which serves about 300,000 Minnesotans who don’t get insurance through employers or public programs such as Medicare, and figure out why it is not working.
Here’s what has been missing from the premium hike debate: There are some Minnesota-specific conditions that may potentially undermine affordability in this small market segment. One is the fate of the state’s former high-risk pool, which provided coverage — albeit costly — to those denied insurance because of pre-existing conditions.
Once the ACA’s popular protections for pre-existing conditions kicked in, these consumers moved into the state’s individual market, where their premiums often were much more affordable. The question before policymakers now hinges on the basic premise of insurance: spreading risk. Are there enough people in the state’s individual market to spread out the expensive care needed by the former high-risk pool customers?
The question is even more critical because of Minnesota’s decision, unique among states, to extend MinnesotaCare as a “Basic Health Plan” under the ACA. Many people who might be in the individual market are instead better served by the more affordable MinnesotaCare. But that further reduces the size of the individual market risk pool.
There certainly are other factors, such as prescription drug costs, driving premium increases. But it makes sense for the state’s new health care task force, which is considering improvements to the ACA here, to focus on the individual market. A key question: Should the individual market be merged with the state’s small-group market, which serves small businesses? That would double the size of the risk pool to about 600,000, potentially spreading high-cost care among more people.
Department of Commerce Commissioner Mike Rothman has been a voice of reason in the premium debate. He sent a letter to the task force, urging it to prioritize individual market fixes and give careful consideration to merging the two markets. The small group’s premiums leveled off for 2016. Insurers also don’t appear to have lost money on this small-group market in recent years, suggesting that a merger could be beneficial.
Rothman and his agency need to become even more aggressive advocates for making the individual market work better, and lawmakers, Gov. Mark Dayton and the task force need to follow their lead. Cooperation and a willingness to delve into policymaking “weeds” is critical for future affordability.