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Insurance rate hikes upset state officials

By Don Davis

Forum News Service

ST. PAUL — Minnesotans who buy their own health insurance will pay more next year, in some cases a lot more.

Officials of the state Commerce Department and the MNsure Web-based insurance sales site Thursday announced insurance rates for Minnesotans who buy their own policies will rise 14 percent to 49 percent. However, that only affects the 5.5 percent of Minnesotans who buy health insurance policies on the open market; most have employer-provided insurance or receive government-paid health care.

The increase prompted strong reaction, ranging from Gov. Mark Dayton predicting that the public would demand that today’s insurance companies “be removed as the providers of health insurance” to his commerce commissioner offering a multi-point plan to keep premiums in check to one insurer saying that even with big increases that it will continue to sustain significant financial loses.

Republicans said the increases were no surprise, and blamed them on Democrats.

State officials stressed the need to shop MNsure, or with insurers themselves, to get the best deal.

“Shop around” was a term Commerce Commissioner Mike Rothman and interim MNsure CEO Allison O’Toole used. O’Toole said a new comparison tool will be available when 2016 enrollment opens Nov. 1, a tool she said would give Minnesotans a better way to decide what policy is best for them.

O’Toole said that people around the state are available to help people trying to pick a plan.

While rates are headed up in all of the state for 2016 plans, increases varied.

The Commerce Department provided data that showed for a 2016 mid-level plan compared to similar ones this year, rates in western Minnesota will rise faster than in other parts of the state.

In the southwest, the increase will top 40 percent, while the rest of western Minnesota the premium will rise 30 to 35 percent. A Twin Cities resident getting the policy would pay 28 percent more next year, followed closely by a 25 percent jump in the northeast and south-central regions.

The number of policies from which a Minnesotan may pick varies from 29 to 71, depending on where the person lives.

The prices apply both to policies bought via MNsure (www.mnsure.org) or privately through insurance companies.

O’Toole said that in many cases the increases are misleading because Minnesotans may be eligible for federal subsidies that lower insurance costs. A single person earning more than $47,000 could be eligible for the federal aid.

The rates he announced Thursday are “unacceptably high,” Rothman said.

The commissioner offered a plan that he said could help hold down premiums, including looking at how much insurance companies have in the bank and the size of salaries paid top executives.

His boss, Dayton, used stronger language: ““I am extremely unhappy with these extremely high insurance rate increases. The insurance companies, who are responsible for them, will force Minnesotans into plans with less complete coverage or drive them out of the insurance market entirely. ... If health insurance companies make good coverage unaffordable for Americans, I believe citizens will soon demand that insurers’ excessive administrative overheads be eliminated, and that they be removed as the providers of health insurance.”

Republicans all along have opposed MNsure and blamed the high rates on the Democrat-pushed plan. However, House Speaker Kurt Daudt, R-Crown, said he likes part of Rothman’s plan that would lump small businesses in with individuals to create a larger pool that could lower premiums.

“Instead of saving families money and providing Minnesotans more access, MNsure really has cost Minnesotans more money and not really provided the access in health care that was proposed,” Daudt said.

A statement from the state’s largest insurer, Blue Cross Blue Shield, said its rate increases will not solve fiscal woes.

“We also understand the impact that these necessary price adjustments will have for many of our members,” the statement said. “However, even with these increases, Blue Cross is likely to experience continued significant financial losses through 2016.”

Some premiums for small businesses that provide insurance for employees will fall as much as nearly 13 percent, while some will rise almost 6 percent.

Rothman said that even with the individual policy increases that Minnesota will maintain the lowest Upper Midwest rates and will have some of the lowest in the country.

Minnesota insurance companies this summer submitted plans to increase insurance rates an average of 43 percent, with a high of a 74 percent boost in one plan. Rothman talked insurance companies down, Dayton said, but not as much as he wanted.

MNsure users no longer will have the opportunity to buy the top-level plans, with the most coverage. Insurers will not offer platinum plans next year through MNsure, although they still will be available from private insurers. While the Commerce Department does not have numbers for this year, in 2014, 5.3 percent of MNsure enrollees and 7.9 percent of others who bought private plans went with platinum.

While Rothman can lobby for rate changes, he cannot order them if insurance companies can justify their increases.

Don Davis
Don Davis has been the Forum Communications Minnesota Capitol Bureau chief since 2001, covering state government and politics for two dozen newspapers in the state. Don also blogs at Capital Chatter on Areavoices.
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