With health insurance premiums on the rise, more MNsure shoppers are buying “bronze” policies that feature lower premiums but larger out-of-pocket costs when they use health care.
Since open enrollment started last month, 50 percent of those buying private plans through the exchange have selected bronze plans, MNsure reported on Wednesday, up from 34 percent a year ago.
The shift could be a sign of more people selecting health plans with out-of-pocket spending requirements they can’t afford — a scenario that is a growing concern among health care policymakers.
MNsure board chairman Peter Benner said Wednesday he shares the concern, but argued it’s too soon to draw conclusions from the latest numbers. The exchange expects a surge in enrollments leading up to a Dec. 15 sign-up deadline for coverage that starts Jan. 1.
“If our 50 percent choosing bronze are in that half of the population that uses almost no care, then those are rational decisions,” Benner said following a board meeting in St. Paul. “If a bunch of those folks, however, are in poor or fair health, then I’m worried.”
The enrollment figures released Wednesday show that MNsure is more than one-third of the way to its goal of 30,000 new sign-ups in private health plans for 2016, with 12,180 people enrolling in commercial coverage so far.
Sign-ups in private coverage are important to MNsure’s finances, because the exchange funds a chunk of operations through a 3.5 percent tax on the value of premiums for those policies.
Minnesota created the MNsure exchange in 2013 to implement the federal Affordable Care Act, which requires almost all Americans to have health insurance or pay a tax penalty.
Since its launch, MNsure has lowered enrollment projections several times. Technical problems in 2013 hurt sign-up tallies, and low premiums in the state have meant that relatively few people qualify for federal tax credits — a key incentive for using MNsure.
Premiums in the individual market are up an average of 41 percent next year, which means more Minnesotans are qualifying for federal tax credits to discount their costs, MNsure says.
Benner said he believes the exchange is ahead of last year’s enrollment pace, but added, “until you have the [deadline] enrollments in, I don’t want to say anything more than I’m encouraged.”
In addition to next week’s deadline, consumers have until Jan. 15 to enroll in plans for February. Open enrollment ends Jan. 31, with coverage for those enrollees starting in March.
History suggests there will be a sign-up surge within a week of each deadline, Benner said, so the numbers released Wednesday likely will change.
The possibility of more people buying bronze plans was a topic for discussion earlier this month during a meeting of the state’s new Health Care Financing Task Force.
Dannette Coleman, a senior vice president with Minnetonka-based health insurer Medica, said during a subcommittee meeting Friday that she was surprised and concerned by the early preference for bronze plans among people selecting plans from her company.
“The concern that I would have is … these folks bought down to [find] a monthly premium they can afford, but now they have deductibles they maybe can’t afford,” Coleman said.
Allison O’Toole, the MNsure chief executive, said during the task force meeting that she was watching the issue, too. The good news, O’Toole said, is that MNsure users are using a new online tool launched in November to highlight trade-offs between premiums and out-of-pocket costs.
“We are seeing heavy traffic on that,” O’Toole said. “People are spending, I think, on average, a little over 9 minutes with that tool right now.”
Numbers released Wednesday show that 50 percent of those signing up for private plans on MNsure thus far are age 55 to 64. That’s a greater share than one year ago, when 41 percent of enrollees were in that age group.
Older people are more likely to receive subsidies, Benner said, because they pay higher premiums.
“To me that is, I think, encouraging news,” he said. “Folks in that age group are understanding that that advanced premium tax credit can be a very big deal for them.”
Beyond buying private coverage, individuals and families use MNsure to enroll in the state’s public health insurance programs.
Thus far during open enrollment, 22,500 people have signed up for Medical Assistance coverage through the exchange, while another 9,691 have signed up for the state’s MinnesotaCare program.
About 5,500 people have renewed private policies through MNsure during open enrollment.