State regulators are making a last-ditch effort to recruit more health insurers to the MNsure exchange, particularly to sell coverage outside the Twin Cities metro area for 2017.
In a request for proposals this week, regulators asked interested parties to propose waivers of state laws or rules that would allow them to newly offer coverage to residents outside the seven-county metropolitan area.
Insurers would provide at least one health plan option that could be sold through MNsure in one or more counties, according to an Aug. 15 notice from the state departments of health and commerce.
The timing of the request is unusual because open enrollment for 2017 health plans is less than three months away. It suggests significant concern about a lack of competition in the individual market, where there already were fears that premiums could spike.
“This is a distress call,” said Stephen Parente, a health insurance expert at the University of Minnesota. “This is for the 2017 year, and you’re putting it out on August 15th? You should be putting this out on Jan. 15th or Feb. 15th.”
MNsure and health insurance exchanges for all other states were launched for 2014 under the federal health law. Concern about competition on the exchanges has been growing in recent months as three of the largest national insurers announced pullbacks, along with similar moves by regional players.
On Friday, the health care consulting firm Avalere published a report predicting a sharp decline in competition in several states.
MNsure is an option for the roughly 5 percent of state residents who buy health insurance on their own.
It’s part of the state’s individual market, which serves self-employed people and those who work at firms that don’t provide health insurance.
Commerce and health officials declined an interview request about this week’s proposal.
“The goal of this effort is to allow innovative health insurance products that can foster additional competition, choice and meet the needs of Minnesota’s individual insurance market,” the Minnesota Department of Health said in a statement.
Rep. Greg Davids, R-Preston, raised concerns in a letter to state officials this week about the request for proposals, asking if it might let new insurers avoid requirements for financial reserves or gain an advantage by skipping benefit mandates.
“Most troubling is the overwhelming and ominous sense that Minnesota families should prepare for another round of blistering price increases and reduced options this fall,” Davids wrote.
At its launch in 2014, five health insurers sold products through MNsure. Golden Valley-based PreferredOne dropped out for 2015 after suffering unsustainable losses. Citing financial losses even after a major premium hike, Eagan-based Blue Cross and Blue Shield of Minnesota in June said it would pull health plans sold on its insurance company license, while maintaining HMO products.
Those HMO plans, however, aren’t offered in 11 rural counties.
In a few of those counties, the Blue Cross pullback could leave consumers with just two options, said Cynthia Cox, a researcher with the Kaiser Family Foundation who tracks plan offerings across the country.
“The fact that the state is requesting proposals for exchange plans this late in the year ... suggests there is concern over insurer participation in rural counties,” Cox said via e-mail. “Other plans could also plan to change their service areas, leaving these counties with one or no exchange options.”
The state Commerce Department and insurers are negotiating what plan options will be sold for 2017 and at what price.
Neither the department nor carriers would comment on the negotiations, saying the details are confidential. MNsure officials also had no comment.
In a statement this week, a spokesman for Minnetonka-based Medica said that for every $1 in premiums collected by insurers in 2015, there was $1.38 in health care costs across the individual market. The trend has continued in 2016, the company says.
“Given those market conditions, we have refiled our products and prices for 2017 in a way that adequately covers the cost of care in the market,” said spokesman Rob Longendyke.
In a statement, a spokesman for Bloomington-based HealthPartners said: “We’re still evaluating our 2017 individual health plan options, and should be able to share more information on our plans in the coming weeks.”
A spokeswoman for Minneapolis-based UCare said by e-mail: “We plan to continue to offer our products on MNsure through our Minnesota provider network.”
The Commerce Department expects to release final approved rates with plan details by Oct. 1. Open enrollment is Nov. 1 through Jan. 31.
While regulators are prioritizing more insurance options for counties beyond the Twin Cities, the request for proposals says respondents may also contemplate selling in the metro and the off-exchange market.
It says groups that might respond include “accountable care organizations,” which typically are collaborations between health systems and insurers, as well as county-based purchasing groups, which are governmental agencies that serve as managed care organizations in the state’s public health insurance programs.
Proposals are due Sept. 9 with public comment open Sept. 12 through Sept. 26.