EDITORIAL: Health insurance price hikes are daunting, but state can rise to challenge

Sept. 10--Mammoth rate hikes for Minnesotans who buy their own health insurance certainly ought to inspire outrage. While financial assistance available under the Affordable Care Act (ACA) through MNsure will soften the blow for many, not all will qualify for this aid. Yearly double-digit increases are not sustainable even with federal dollars to help families pay monthly premiums.

But some important, can-do perspective was missing in the recent uproar over the proposed prices for 2017 individual market coverage. Minnesota isn't known nationally as a health care standout just because of its world-class medical providers. It also has long been ahead of the curve when it comes to health insurance access. The MinnesotaCare program for working families and the state's high-risk pool for the uninsurable, one of the first in the nation, particularly highlight policymakers' compassionate, farsighted work.

The state's track record in finding solutions to complex health care challenges suggests that Minnesota can also address the individual insurance market's weakness. It won't be easy, but it should be manageable. The individual market comprises a small slice -- roughly 5 percent -- of Minnesotans (the rest of us get insurance through employers or programs such as Medicare). In addition, few states have as much health care expertise residing within their borders.

That's a key reason why the Star Tribune Editorial Board has long called for the creation of a state health care task force to focus on stabilizing the individual market. It's good that Gov. Mark Dayton heeded this advice recently when he called for a previous health care finance group to reconvene and drill down into this challenge. It's a pressing issue, because average rate increases for 2017 coverage range from 36 to 67 percent.

Solutions will require legislators' input and action. That's why calls by some Republican lawmakers to "kill" MNsure in the wake of the rate hikes are unhelpful. MNsure, launched as part of ACA reforms, is an online marketplace selling health insurance. Consumers can buy coverage through MNsure, but they can also buy plans directly from insurers. In fact, about 73 percent of the 270,000 people in Minnesota's individual market purchase plans outside MNsure.

The state's ailing individual market is composed of all of these policyholders. Laying the blame for price hikes on MNsure is akin to blaming one website, such as Travelocity, for unaffordable airline tickets.

As the task force gets to work, it should recognize that the problem before it is one that has vexed policymakers throughout the modern era. "How to insure the uninsurable," is how Lynn Blewett, a respected University of Minnesota researcher, sums it up.

To protect profits and tamp down plan prices, insurers historically have sought to exclude people requiring ongoing, expensive medical care. This is a key reason why Medicare, the popular health insurance program for the elderly, was launched in the 1960s. It's also why Minnesota formed a "high-risk pool" in 1976 for those with preexisting health conditions.

Thanks to the ACA's protection, those with preexisting conditions can buy on the individual market, where they may have more choices and where coverage often is more affordable than what the high-risk pool option provided. One major problem with the state's individual market is that it appears to be too small to spread out these costs affordably among all individual policyholders.

There are some in Minnesota who want to return to the days of the state's high-risk pool, which worked well for the healthy but not for those who were ill. Premiums in the pool often were unaffordable, with cost ceilings set at 125 percent of the average premium rate for a comparable commercial plan. Research published by Blewett in 2011 concluded that some people were leaving the state's high-risk pool because of its high cost, even though the state sometimes tapped the general fund to shore up its finances.

Possible solutions to bring rate relief include merging the individual market with the one serving small employers; this would increase the number of people paying in. Launching a state-run financial safety net for insurers serving high-cost patients is another. Also worthy of consideration: allowing consumers to buy into the MinnesotaCare program or to tap into ACA financial assistance in plans sold outside MNsure.

All options should be explored, but solutions must be forward-looking and acknowledge that the ACA is the law of the land. Minnesota has long risen to the challenge of providing affordable access to health care. It can do so again.

___

(c)2016 the Star Tribune (Minneapolis)

Visit the Star Tribune (Minneapolis) at www.startribune.com

Distributed by Tribune Content Agency, LLC.