As MNsure enrollment grows, Blue Cross and Blue Shield of Minnesota is losing market share while Medica is growing, according to numbers released Wednesday by the state’s health insurance exchange.
Last year, Blue Cross had 50 percent of the MNsure market, but the health insurer’s share currently stands about 36 percent, according to figures presented to MNsure’s board of directors during a meeting in St. Paul.
Meanwhile, Medica’s 5 percent of the MNsure market last year has grown to 19 percent so far in 2016.
The shift fits with changes in the premiums being charged by both companies, said Peter Benner, the MNsure board chairman, during an interview after the meeting. Medica rates in the individual market this year are up an average of 14 to 16 percent, compared with average jumps of 45 to 49 percent at Blue Cross.
Benner said the difference shows up in the Rochester area, in particular, where Blue Cross and Medica have dominated the MNsure market.
“In southeast Minnesota, the Medica plans for given metal levels are the lowest-priced plans in the rating area, in some cases by a bundle,” Benner said.
Minnesota launched the MNsure health exchange in 2013 to implement the federal Affordable Care Act, which requires almost all Americans to have health insurance or pay a tax penalty.
It’s an option for the roughly 300,000 state residents who purchase individual and family coverage for themselves, outside of employer groups and government programs.
In 2014, MNsure started out with some of the lowest premiums in the country, but has seen significant price jumps and market share changes ever since.
“We recognize that Minnesota’s insurance market continues to experience significant transitions,” said Blue Cross spokesman Jim McManus in a statement.
“Although we would like to retain all of our members during open enrollment, these kinds of shifts are not surprising,” McManus said. “Individual costs have risen at historic levels in recent years and it’s going to take some time for the market to adjust.”
While Minnetonka-based Medica is now the insurer growing fastest on the exchange, it continues to have the smallest market share of the four insurers selling MNsure policies. Bloomington-based HealthPartners and Minneapolis-based UCare are holding steady with 24 percent and 21 percent of the MNsure market, according to the numbers released Wednesday, while Blue Cross remains the largest, albeit by a smaller margin.
For Medica, the growth “is what we expected,” said Dannette Coleman, a senior vice president with the company, in a statement. “We are a little surprised that nearly all of the BCBS portion appears to have come to us.”
Market share information is not yet available for the “off-exchange” market, where individuals buy coverage directly from health insurers rather than through MNsure. That portion of the market has been considerably larger than the MNsure portion, and the lack of off-exchange data makes it difficult to interpret other numbers released Wednesday by MNsure.
The MNsure numbers suggest an apparent “graying” of the market, since 38 percent of those buying this year are age 55 to 64. That’s up from a 31 percent share in 2015.
This might suggest troubles with the so-called “death spiral” that many have feared might happen across the country with new exchange markets.
If too great a share of subscribers are older people with health problems, they could drive up premiums in the market and prompt younger and healthier people to not buy coverage. Insurers, in turn, would see big financial losses and likely would drop out of the markets — a problem for the health law, since it depends on health plan competition to contain costs.
But in Minnesota, MNsure’s risk pool is combined with the risk pool of the much larger off-exchange market. It could be that more people in the 55 to 64 age group are simply shifting from the off-exchange market to MNsure, Benner said, as opposed to the overall risk pool getting older.
“They’re the ones who benefit most from the [tax credits],” Benner said.
Another factor is the timing of sign-ups. Older people and those with health problems have more reason to buy through MNsure early in open enrollment, while younger people and those who are healthy might wait until the exchange’s final sign-up deadlines later this month.
Between MNsure’s data release in December and those released Wednesday, there already were signs of a shift toward more younger people buying.
Thus far during open enrollment, 45 percent of those buying through MNsure have selected “bronze” policies with very large deductibles. That’s a greater share than the 36 percent share last year, although the increase has moderated from numbers MNsure reported in December.
While there’s concern nationally that more bronze policies will lead to more people with unaffordable out-of-pocket costs, it’s hard to say whether that will happen for the MNsure enrollees, Benner said.
As of Jan. 10, nearly 70,000 people had purchased private coverage through MNsure during the current open enrollment period. The tally already has exceeded last year’s sign-up total, and is getting closer to the exchange’s goal of 83,000 enrollees by the end of 2016.