Cost of renewing health insurance policies bought via MNsure could give consumers rate shock

MINNEAPOLIS — Minnesotans who bought policies on the state's health insurance exchange are starting to get their first renewal notices, and many could be in for a jolt.

Premiums for most of the more than 55,000 individuals signed up for private insurance plans via MNsure are going up. For the nearly 33,000 who have coverage from PreferredOne, most who want to keep those policies next year will have to pay over 60 percent more, according to officials with the Minnesota Association of Health Underwriters who've seen the company's rate data.

Tom Beckfeld, a self-employed snowplower and window cleaner from Big Lake, acknowledged he's worried about getting a big rate increase notice from PreferredOne. But he said he has saved so much money thanks to the Affordable Care Act's ban on excluding patients with preexisting conditions that he'll still be better off.

Beckfeld, 56, has diabetes and high blood pressure. The only insurance he could get before MNsure cost about $750 a month. PreferredOne charges him $421 a month and covers much more, including drugs. He put the savings at about $12,000 this year.

"Even if PreferredOne doubled its rates and came more in line with Blue Cross and everybody else, I'm still looking at saving thousands of dollars a year," he said.

Most people who bought PreferredOne policies via MNsure are expected to switch to other carriers because PreferredOne —which grabbed the largest market share by offering the lowest rates — is pulling out of the exchange. Consumers who qualify for tax credits definitely will have to choose other carriers because subsidies are available only through MNsure.

Premiums for three of the four carriers sticking with MNsure will also rise, the plans have confirmed. Blue Cross and Blue Shield of Minnesota, which was No. 2 with 22 percent of the signups this year, will raise its premiums an average of 17.2 percent. HealthPartners's rate increases average 8.1 percent, while Medica's will rise just 1.8 percent. However, UCare's average premiums will fall 9.1 percent.

Blue Cross and HealthPartners recently started sending out renewal notices. Medica and UCare officials said theirs won't go out until early November, just ahead of open enrollment, which begins Nov. 15. A PreferredOne spokesman did not respond to requests for comment on its rates and renewal plans.

Heidi Michaels, an insurance broker with Dyste Williams in St. Louis Park, said she's already helping clients sort out their options. For example, she has an Eden Prairie family of four with a PreferredOne plan with a $710 premium and a $4,000 deductible. The closest 2015 PreferredOne plan they could choose would cost 42 percent more with a $7,700 deductible, and their clinic isn't in that network. They could also choose a Blue Cross plan that includes their clinic and cuts their deductible to $2,000, but the premium is 37 percent higher and office visits are limited to two.

"So they're left with not-great choices, but regardless of their choice they're going to have an increase," said Michaels, president-elect of the underwriters group.

HealthPartners has already sent "pre-renewal" letters to help its members prepare, said Executive Vice President Andrea Walsh.

Anthony Schmitz, a custom kayak builder and writer from St. Paul, indicated that he'd be glad to get a renewal notice, whatever it says about a premium increase — at least it would be evidence that he's insured.

"I believe as of yesterday I have insurance again, but who knows?" Schmitz said.

Signing up was also a "long ordeal" for pastor David Berge. But the 32-year-old, his wife, and two sons ultimately got Medica and UCare plans through the public Medical Assistance program for lower-income people, which comes without any premium. And a note in his mail recently was welcome.