In the latest sign of stability for the state’s individual health insurance market, people who buy health plans through MNsure or directly from health insurers will see average premiums next year remain steady or even decline a bit.
Meanwhile, average premiums for most of those covered through a small-business health plan will see average increases of about 4%, according to data released Tuesday by the Minnesota Department of Commerce.
The final rates suggest a degree of equilibrium for markets where more than 400,000 state residents obtain health insurance coverage. It is a sharp contrast to the recent past in the individual market, which saw premium spikes, a shifting lineup of carriers and an exodus of more than 100,000 consumers after changes beginning in 2014 with the federal Affordable Care Act (ACA).
“The market is no longer blowing up,” said Joshua Haberman, an insurance agent with Alexander & Haberman in the Twin Cities. “Fundamentally, that market is stabilizing.”
Commerce said Tuesday that consumers buying individual coverage from the four largest carriers in the state’s market will see average premium changes that range from an increase of 0.18% at UCare to declines ranging from negative 1% to negative 1.5% at HealthPartners, Medica and the HMO at Blue Cross and Blue Shield of Minnesota.
For Blue Cross and HealthPartners, the final rates are a downshift from proposed increases in the low- to mid-single digits that carriers filed with regulators in July. Actual rates for consumers will vary by health plan specifics, geography and age.
As of April, about 155,000 Minnesotans were covered through individual health plans. More than 61,000 individuals in the market are receiving premium tax credits, which are part of the ACA.
Consumers at certain income levels can qualify for ACA tax credits, so long as they buy coverage through the MNsure health insurance exchange. Two-thirds of the individual market currently buys through the exchange, which the state government launched as part of the ACA.
“There is a misconception that most people earn too much to qualify for financial help through MNsure,” said MNsure CEO Nate Clark. “The truth is that an individual earning up to $49,960 a year, or a family of four earning up to $103,000 a year, can qualify.”
There are still problems for many consumers in the state’s individual market.
Premiums remain high for those who don’t get tax credits. Many health plans feature large out-of-pocket spending requirements through deductibles. And all plans in the market control costs with relatively tight networks of doctors and hospitals, leaving patients with limited choices when they need care.
Minnesota has taken several actions to help stabilize the market, including a reinsurance program that uses taxpayer dollars to help cover the cost of unusually high medical bills among subscribers. The impact shows not only in the flat premiums for next year, but also competitive moves by carriers in the market.
Eagan-based Blue Cross, for example, will start selling individual coverage next year in 10 additional counties, meaning the carrier will become a statewide option along with Minnetonka-based Medica. Bloomington-based HealthPartners is adding three counties next year.
Next year, every county in Minnesota will offer at least two insurers, compared to four counties with only one individual-market carrier in 2019, MNsure said in a statement.
While the lineup of insurance companies selling coverage via MNsure is holding steady, those companies are adding a total of 39 new health plan options.
Residents can view 2020 plan options on the MNsure website starting Oct. 15. Open enrollment begins Nov. 1.
Also on Tuesday, Commerce released final rates in the small group market, where about 285,000 Minnesotans were covered at the end of last year. Small group coverage is available to organizations with two to 50 employees.
The vast majority of small group coverage in the state is provided by four health insurance divisions, all of which are reporting average premium increases of less than 5% for next year — HealthPartners Inc. (4.07%) and the insurance divisions at Blue Cross (4.1%), Medica (3.71%) and Golden Valley-based PreferredOne (2%).
Grace Arnold, an assistant commissioner at Commerce, said of the small group rate increases: “It’s slightly lower than we’ve seen in past years.”
Minnetonka-based UnitedHealthcare, the health insurance giant that was new to Minnesota’s small group market in 2019, is increasing small group rates by an average of 8.87%. In 2020, the company is introducing HMO products in the small group market.