Small business premiums grow more slowly

The state has approved health premium increases for small businesses next year that generally are lower than the increases seen going into 2018.

About 303,000 Minnesotans are covered by small-group health plans, which cover businesses and organizations with two to 50 full-time employees.

This week, the Commerce Department announced that large carriers in the small group market would increase premiums by an average of 3 percent to 12 percent in 2019, down from a range of 8 percent to 14 percent for 2018.

"During the past few years, most small-group insurers have had relatively modest rate increases," said Commerce Commissioner Jessica Looman. "This is also the case this year. … Most rates will see a single-digit increase."

Looman announced the rates at a news conference this week that focused primarily on rate decreases in the market where individuals buy health insurance. While the individual market is now considerably smaller than the small-group market, it continues to garner more attention due in part to controversy over how the individual market has become more costly for many under the federal Affordable Care Act (ACA).

The small-group market grew considerably in 2017, when rate hikes in the individual market prompted many consumers to find different sources of coverage. There was anecdotal evidence at the time that individuals moved to the group market coverage in order to maintain access to their preferred doctors and hospitals.

Looman said the prices for small-group and individual coverage are moving closer together.

The new carrier is Minnetonka-based UnitedHealthcare, which has had a relatively small presence in Minnesota's health insurance markets despite being the nation's largest health carrier.

In 2017, the four largest carriers in Minnesota's small-group market were HealthPartners, Blue Cross and Blue Shield of Minnesota, Medica Insurance Co. and PreferredOne Insurance Co. For 2019, those four health insurance divisions will increase premiums by an average of 6.7 percent, 4.6 percent, 11.9 percent and 3.0 percent, respectively, according to Commerce. (Blue Cross, HealthPartners and PreferredOne also sell small-business coverage through different divisions that will see a different average rate of change.)

"As in years past, these rate increases reflect the general rise in costs for medical services and prescription drugs," Commerce said in background materials released this week. "Rate increases for 2019 also reflect higher medical utilization levels and claims reported by the health plan companies, due to a somewhat less healthy enrollment population than in prior years."