Medica's return to individual market means second option for 62 Minnesota counties

The state's fragile market for individual health insurance shoppers offered another last-minute surprise Tuesday as regulators announced that health plans from Minnetonka-based Medica are once again for sale.

The development is particularly important for consumers in 62 counties across western and southern Minnesota that otherwise have had only one health plan option in the individual market.

In November, the state Commerce Department announced that Medica was no longer an option for new customers because the health plan had hit its enrollment cap for 2017.

On Tuesday, Commerce reported that not as many Medica customers renewed policies as expected, so the insurer once again has room for new enrollees — about 7,000 slots, a Medica official told the Star Tribune on Tuesday.

"Medica's 2017 enrollment has fallen below the set limit, so it is again accepting new enrollments for 2017," the Commerce Department said in a statement.

The news affects only the state's individual market, where about 5 percent of Minnesotans buy coverage.

It's the market for self-employed people and those who don't receive coverage from their employer or a government program.

The imposition of a cap for Medica and other carriers was a highly unusual step that regulators said was needed to save the individual market, which otherwise would collapse with insurers pulling out to avoid more financial losses.

Since November, the loss of Medica in 62 counties across southern and western Minnesota has been a problem because the network for the remaining insurer — the HMO division at Blue Cross and Blue Shield of Minnesota — didn't include all doctors and hospitals in those regions.

In western Minnesota, some patients scrambled at the start of open enrollment to make sure they signed up with Medica, so they could maintain access to their doctors. In southeast Minnesota, the Blue Cross HMO network does not include Olmsted Medical Center in Rochester, said Michael Pagelkopf, an insurance agent in Rochester.

"If they used Olmsted Medical Center, they now have an opportunity to gain that provider with Medica," Pagelkopf said of Tuesday's announcement.

A Blue Cross spokesman disputed the description of its HMO networks as "narrow," saying they are focused on specific care systems and affiliated hospitals and clinics.

Medica plans in the individual market are sold in all Minnesota counties, except for Cook and Lake counties in northeastern Minnesota. The plans will remain an option until the enrollment period ends Feb. 8, or the slots fill up.

"We are accepting new enrollment through MNsure in all Minnesota counties where we offer plans," said Craig Ashby, a senior director with Medica, in a statement.

Minnesota's individual market has been undergoing significant change with the federal Affordable Care Act (ACA), with several carriers reporting large financial losses, as a result. Last fall, Commerce said it would let Medica and most other insurers that sell nongroup coverage cap enrollment as an emergency measure along with premium hikes and tight networks to help save the market.

Medica is selling individual market policies for 2017 only through the state's MNsure health insurance exchange. The Blue Cross HMO, which goes by the name Blue Plus, also sells through MNsure alongside health plans from HealthPartners and UCare.

Blue Plus and HealthPartners also sell individual market policies in the "off-exchange" market, where individuals buy directly from insurers.

The fact that Medica can sell coverage again to new enrollees is a hint the state's individual market might still be shrinking, since it means none of the primary insurers in the market with caps have maxed out their 2017 enrollment.

Christopher Snowbeck • 612-673-4744

Twitter: @chrissnowbeck