Illustration: M. Ryder Tribune Media Services
Minnesota icon Paul Bunyan has announced that colossal changes are coming to Minnesota health care. Federal health care reform is here. Although Americans remain divided about the law, there’s no debate that its effects are coming.
How will the changes impact you and your family? That depends. The truth is that upcoming changes will be as unique as your fingerprints and will depend on your current health insurance.
Federal reform will change the insurance situation for about 24 percent of Minnesotans in four categories: Those who are currently uninsured; those who buy coverage on their own; those who are covered by Minnesota Comprehensive Health Association (MCHA) or MinnesotaCare, or those who work for companies with 50 or fewer employees.
But it’s equally important to remember that 76 percent of Minnesotans won’t experience major differences in benefits or premiums due to federal reform. The most common change for these Minnesotans will be the additional cost of 1 to 3 percent in federal taxes added to premiums paid by large companies.
If you are in the four categories subject to changes, here’s the basic information you should know:
• About 54 percent of Minnesotans who do not have insurance now qualify for low-cost or free coverage through MinnesotaCare or Medicaid. Another 35 percent of people without insurance will be eligible for help paying for coverage. This financial help will be paid for in part by a new federal premium tax.
• Many people will be buying more benefits than before, including coverage for mental health, substance abuse, maternity care, and dental care and eyeglasses for children. More benefits mean higher premiums.
• About 120,000 people will have lower deductibles than in the past, increasing their premiums.
• If you or your employer paid more for coverage because of a preexisting condition, that added charge goes away.
• If you or your employer received a discount because you’re healthier than average, that discount is gone.
• MCHA enrollees will have a year to transition into the private market, where their preexisting conditions will no longer exclude them from coverage.
• MinnesotaCare rules will change, moving about 10,000 current enrollees into the private market, with help paying their premiums and medical care costs.
• Individuals will have many coverage options during open enrollment. No one will be denied coverage, even if they are already ill or injured. These costs will be shared among everyone who is insured, increasing premiums.
• Premiums paid by smaller companies and individuals could see up to 5 percent in added taxes, including two federal taxes and one state tax to fund MNsure, the state’s new online marketplace for health insurance.
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Wondering where you fall? The website myhealthcarefuture.org can help you figure it out. The site asks a few questions and helps Minnesotans personalize changes coming through federal reform. Or, you call the number on the back of your insurance card for answers about how your current coverage will be affected.
Meanwhile, in just 30 days, the state will launch the MNsure website, an online marketplace giving Minnesotans another place to buy health insurance. The new marketing campaign featuring Paul Bunyan has introduced Minnesotans to the website.
A key component of federal health care reform, MNsure is designed to make it easier for people to comparison-shop across health plans.
MNsure will display plans for individuals and families who are buying their own coverage, as well as plans for companies with 50 or fewer employees. Similar plans will continue to be available directly from health plans or insurance brokers.
So MNsure is not for everyone — people who are covered by Medicare or are disabled, along with Minnesotans who have coverage through large companies, can continue to obtain coverage as they have in the past.
How it will work
Minnesotans who buy coverage on their own will see options in four categories: bronze, silver, gold and platinum. People under 30 will have a fifth option — catastrophic coverage. Whether you purchase coverage directly from health plans, brokers or through MNsure, you will make two key decisions when selecting your health care coverage: 1) Where will I go to receive my care? And 2) How do I want to pay for care?
• Where to receive care: At one end of the continuum, you will see coverage options that include doctors and their staff members who will help you navigate often-complex health care systems to ensure you get the care when and where you need it. (These high-value provider networks improve care for patients while reducing waste and inefficiencies in the system.) On the other end of the continuum, you may choose a broader list of doctors, hospitals and clinics. Of course, there also are options in-between. The price difference between the two ends of the spectrum can be as much as 10 percent or more.
• Paying for care: Another consideration if you purchase coverage on your own is how you prefer to pay for care. Do you want to have the lowest premium payment each month but pay more when you receive health care services? Or does it work better for you to pay more each month but less out-of-pocket when receiving medical care?
In addition to your monthly premium, the most you could pay out-of-pocket for health care services in one year is $6,350 per individual, or $12,700 per family. And there is no longer a dollar limit on how much care you can receive in a lifetime.
How much will coverage cost?
On MNsure, an individual could have dozens of coverage options from Minnesota’s nonprofit health plans, depending on where he or she lives.
Hypothetically, a 40-year-old in the Twin Cities could choose coverage at a cost of about $300 a month and pay around $500 in medical bills before insurance kicks in. This 40-year-old could lower his monthly payment to around $160 by selecting coverage with $5,300 upfront payment for care.
A 60-year-old in the metro area could see monthly costs from around $360 to $440, with upfront payments for medical care between $1,300 and $2,500. Depending on where you live, the amount you pay each month could be slightly lower to more than 50 percent higher than in the Twin Cities.
That difference arises because federal health care reform requires health plans set base prices on two factors only: age and where you live. Some regions of Minnesota have higher health care costs than others.
Some people will receive help paying their premium when buying coverage on MNsure. If your yearly income is under about $45,960 as an individual ($94,200 family of four), MNsure offers financial help.
In addition, if you make $23,985 to $28,725 as an individual ($47,100 to $58,875 family of four) you not only will receive help paying the monthly premium, but also will pay less when you receive care. For example, a 50-year-old who makes $27,000 a year could pay $250 to $350 less upfront for care than would someone not receiving financial help and would receive as much as a 10 percent discount on services. The options vary by health plan.
One option you won’t see on MNsure or directly from a health plan is “Obamacare.” This is a nickname for the federal health care reform law, which is formally called the Affordable Care Act, or ACA.
If you are among the Minnesotans who work for companies with two to 50 employees, check with your employer. Many companies will continue to offer coverage in the same way they have in the past, while others may refer employees to MNsure.
When to act?
Minnesotans most affected by the coming changes may enroll beginning Oct. 1. This year you have until March 31, 2014, to purchase coverage through your agent or broker, or directly from a health plan, or through MNsure.
As our state launches MNsure, technical glitches can be expected. But remember that Minnesota’s health plans execute millions of electronic transitions a day with thousands of doctor, clinic, hospital, employer and state and federal partners. They are prepared to do to the same for MNsure.
We live in the land of 10,000 lakes, and upcoming changes may bring 10,000 questions. Know that help is available to answer those questions so that you make the best choice for yourself and for your family.
A final note: Reform isn’t over. Next year is a transition year, and changes will continue toward a new normal. While insurance reforms are implemented, tremendous challenges will remain around the underlying cost of health care services. How we tackle these costs as a community will determine the future of health care for all of us.
Julie Brunner lives in St. Paul and is the executive director of the Minnesota Council of Health Plans.
The Opinion section is produced by the Editorial Department to foster discussion about key issues. The Editorial Board represents the institutional voice of the Star Tribune and operates independently of the newsroom.