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Minnesotans' individual health insurance rates are declining — for now

ST. PAUL — Health insurance rates on Minnesota's individual market will drop for a second straight year in 2019, but the progress toward better affordability could be short-lived.

"I think we need a plan," Jessica Looman, state commerce commissioner, said Tuesday, Oct. 2, when she announced premiums would decrease on average between 7 percent and 27.7 percent. "I think we need to look at what we are going to do moving forward."

That's because the efforts state lawmakers put in place to help stabilize the individual insurance market are winding down. Subsidies for high premiums ended after 2017 and a two-year, $541 million reinsurance program, which limits insurers' losses on high-cost patients, will sunset next year.

Legislative intervention helped stability

Before the Legislature implemented those two programs, Minnesota's individual insurance market saw double digit increases that drove down the number of people purchasing insurance on their own from more than 300,000 in 2015 to about 155,000 today.

Looman said she believes some of that decline was caused by consumers entering other markets, adding that she hopes those who abandon individual plans will come back as insurance gets more affordable.

State officials also credited the state's strong economy, a decline in utilization of medical services and prescription drugs and healthier customers as reasons the individual insurance market has stabilized.

Actual savings in 2019 will depend on a consumer's age, what plan they buy and whether they qualify for tax credits, officials said.

MNsure open enrollment coming

The majority of Minnesotans who buy insurance on the individual market use MNsure, the state's marketplace for the Affordable Care Act, or Obamacare, because that is the only way to qualify for tax credits. Individuals earning up to $48,560 and a family of four earning up to $100,400 annually can get federal help to buy insurance.

"MNsure is still here, we can save you money and there is free help if you want it," said MNsure CEO Nate Clark, who noted the ongoing debate in Congress about Obamacare's future.

Open enrollment for MNsure runs Nov. 1 until Jan. 13, 2019, but Clark said consumers can begin window shopping Oct. 15.

The Commerce Department also released rates for small-group insurance that is typically available to businesses with two to 50 full-time workers. About 303,000 Minnesotans get their coverage through the small-group market.

They can expect rates to rise on average between 3 percent and 11.93 percent with one insurer decreasing 2.37 percent. State officials attributed the increases to a general rise in health care costs and higher overall usage of medical services in that market.

What about access?

Health Commissioner Jan Malcolm noted that all of the plans available on MNsure provide comprehensive coverage including preventative care, prescription drugs, mental health and pre-existing conditions.

Taxpayers will no longer face a penalty if they don't have insurance, but state officials say the effect on the individual market should be minimal.

Malcolm added that overall provider networks were also expected to remain stable in 2019 with "only minor changes in service areas." MNsure has faced criticism for the shrinking number of insurers who wanted to do business on the marketplace.

The state will add one health care provider network on MNsure in 2019 and service areas are not going to be reduced, Malcolm said. Only Meeker and Lake of the Woods counties will have one lone provider network with the rest of the state having two or more.

Lots of uncertainty

The future of Minnesota's state-administered health care programs depends a lot on the outcome of the November election. There was bipartisan support for the reinsurance program, but Democratic Gov. Mark Dayton allowed it to become law without his signature, calling it a costly bailout to insurance companies.

Continuing the reinsurance programs would require agreement among the next governor, the Legislature and federal officials. Dayton is not seeking re-election.

Besides figuring out the best way to keep the individual market stable, lawmakers need to decide the future of a 2 percent tax on medical providers that is set to expire at the end of 2019.

The money goes into a health care access fund that is used for a variety of things, including health and human services programs, efforts to keep health care accessible and MinnesotaCare — the state insurance program for the working poor.

Democrats have said allowing the provider tax to expire could hurt health care access, especially for low-income residents. Republicans have countered that federal resources can cover the cost of MinnesotaCare and the health care access fund is typically used for other expenses that should be funded through the typical state budget.

"This is going to be an urgent item for the 2019 Legislature," Malcolm said. "There are things in that health care access fund that we believe are powerfully important for keeping care affordable and keeping Minnesotans healthier, which have nothing to do with the federal reimbursement for MinnesotaCare."

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