Enrollment in individual health insurance policies, particularly through government-run exchanges like
The people who have been buying plans, in turn, are using more health care than expected, prompting a growing number of insurers to recoil from the red ink or propose big rate hikes.
While there are several strategies that might drive more healthy people into the individual market, the measures could prove costly, complex and unpopular.
"There are trade-offs for every policy strategy or solution," said
The troubles are confined to the market for individual health insurance policies. They're purchased by about 5 percent of state residents, or roughly 270,000 people, either through insurers, brokers or MNsure. The market is undergoing fundamental changes with the federal Affordable Care Act.
Starting in 2014, the health law prohibited insurers from denying coverage to people with preexisting health conditions. Government-run websites like MNsure were launched to connect health plan shoppers with tax credits under the health law.
Last week, the federal government released preliminary 2017 rate requests showing that
Health law supporters say a lot of the proposed increases would be absorbed by tax credits for individuals with qualifying incomes. Critics counter that many don't qualify for the subsidies, which shift costs to other taxpayers.
Projecting more losses
Across the country, health insurers have reported similar problems, with some like
Premium increases and cost trends have been more moderate for people in employer-based plans, or the
While the individual market has been an outlier, federal officials say the exchanges aren't fundamentally broken -- they just need some improvements.
The federal health law includes tax penalties for individuals who lack coverage. Bigger penalties might drive younger and healthier people who've been holdouts into the market, said Abraham of the U. Conversely, she said, giving more people bigger tax credits could drive more people into the market.
But she added via e-mail: "The former is a non-starter politically, and the latter will end up costing the taxpayers more."
If private health insurers don't want to compete for business on MNsure, then the state might seek permission from the federal government so that MinnesotaCare coverage could become a "public option" on the exchange, said Sen.
DFLers have talked about providing state-based tax credits to Minnesotans who make too much money for federal subsidies, Lourey said. There's also been talk of a financial safety net for health plans that would be funded by the state, he said, which could help recruit and retain carriers worried about drawing a particularly costly set of subscribers.
State tax credits for individual subscribers are a possibility, too, Davids said, adding that
"I don't know that we want to put a lot more people on public programs," Davids said. "I think that just adds to the cost. There should be a viable, vibrant private market."
One way to get health insurers to compete might be to require participation from companies that sell
Not all carriers, however, are losing money. A June report from
"By contrast, most nationals and large commercial plans used their traditionally commercial network as the starting point, where providers were accustomed to rates that may be 1.5x or 2x
But hospitals and doctors would bristle at private plans paying
Pullbacks announced by insurers across the country mean that an estimated 2.3 million enrollees in health exchange coverage, or 19 percent of all enrollees, could have a choice of a single insurer in 2017, according to an August analysis from the
The report also said that the share of all counties where a single insurer sells exchange plans is likely to increase from 7 percent to 31 percent next year.
The prospect of counties with so few competitors is clearly a problem policymakers must tackle in the short-term, said Abraham. But it all speaks to a more fundamental problem with the growing cost of health care.
"We shouldn't only blame the insurers," she said. "We need to also be thinking upstream about the inputs. It's about medical care utilization and the prices of medical care services that insurers are negotiating with providers."
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