It pays to shop around.
That’s the message from MNsure officials this fall, as the state’s health insurance exchange touts a study that shows switching health plans could tame increases and even mean the difference between a premium jump and a premium discount.
Currently, about 50,000 people buy coverage through the MNsure exchange, including about 28,000 who are receiving federal tax credits this year that discount their premium costs. Open enrollment started Sunday for those who buy individual health insurance policies.
For those with subsidies in health plans that are returning to MNsure for 2016, premiums will increase by an average of 24 percent — even with bigger tax credits — if enrollees stay in the same plan, according to study results provided to the Star Tribune.
Enrollees can convert the premium increase to a decrease of 19 percent, however, by moving to the lowest-cost health plan with comparable benefits, according to the report, which MNsure says will be released later this week.
“We want consumers to make smart choices, and not leave money on the table,” said MNsure’s interim chief executive, Allison O’Toole, in a Friday interview.
Minnesota launched the MNsure exchange in 2013 to implement the federal Affordable Care Act, which requires almost all Americans to have health insurance or pay a tax penalty.
People can use MNsure to purchase individual health insurance policies, or they can buy the coverage in the “off-exchange” market. Across both channels, more than 300,000 Minnesotans currently buy coverage in the state’s individual market, which was the focus of many changes under the health law.
In October, the state Commerce Department announced that rates in the individual market would increase an average of 41 percent. The new study, which was conducted by Wakely Consulting Group, a Florida firm specializing in health care reform, looked only at rates for policies being sold through MNsure plus a few plans moving to the off-exchange market next year, and found similar rates of increase.
Commissioned by the Robert Wood Johnson Foundation, the report found that 85 percent of MNsure enrollees who don’t get tax credits and have plans continuing on MNsure will see an average rate of increase of 38 percent next year if they stick with their current health plan.
By shopping around, these enrollees have the chance to reduce the increase to 20 percent by moving to the lowest-cost plan in the same metal tier, according to the report. Insurance policies on the exchange are grouped according to “gold,” “silver” and “bronze” categories, with health plans in the same metal level covering similar shares of overall costs.
For health plans being moved off MNsure in 2016, the report calculated savings if enrollees stay with the exchange and buy other policies. But the report did not calculate whether comparable savings were available by switching to other off-exchange plans.
The bottom line, O’Toole said, is that health insurance shoppers need to shop.
“They’ve got to get off the couch,” she said. “When you see dramatic increases like this, this is certainly a motivator.”
The impact of switching health plans on premiums will vary by place of residence, age, family composition and tobacco use, according to the report, which adds: “The impact for a specific household may vary significantly from the averages shown.”
Enrollees across all areas of the state will experience an increase of more than 17 percent in the silver policy that has the second-lowest premium cost in the region. Premiums for these “benchmark” policies are important, because they are used to determine the value of tax credits that individuals can receive.
Thepremium hikes “may increase both the number of households that can receive subsidies in 2016 and the subsidy amounts relative to 2015 levels,” the report states.
It’s still not clear exactly how many more Minnesotans might qualify for tax credits with rising premiums. The lack of subsidies in the past was cited by researchers at the Urban Institute in a report this month as one of several factors behind relatively low enrollment in plans sold through MNsure thus far.
Others include the state’s historically low rate of people who lacked health insurance plus large public health insurance programs, which effectively shrink the pool of those who might obtain tax credits. The report added: “Enrollment in MNsure also suffers from poor IT performance, inconsistent navigator and assister efforts, and waning political support.”
Open enrollment began Sunday for more than 300,000 Minnesotans who buy individual health insurance policies, either through MNsure or the state’s larger “off-exchange” market.