Fewer Minnesotans buy individual health insurance, but more use MNsure and get help paying

Feb. 10--Minnesota's individual health insurance market isn't in the clear yet.

Tens of thousands of Minnesotans who purchased health insurance in 2016 are apparently going without this year, beset by soaring premiums, shrinking provider networks and political uncertainty about the future of health coverage. This poses a big risk not just for those individuals trying to make it through 2017 without health insurance but also to the unstable market they leave behind.

Those who remained were more likely than in past years to get help paying their premiums. Out of roughly 190,000 total customers on the individual market, 60 percent bought their insurance through the state-run exchange, MNsure. That's a 34 percent increase in MNsure's enrollment, which in 2014 enrolled only 12 percent of the individual market.

"It looks like MNsure's getting a bigger piece of a smaller pie," said Jim Schowalter, president of the Minnesota Council of Health Plans.

MORE QUALIFY FOR SUBSIDIES

The 114,465 people on MNsure are eligible for federal tax subsidies that are only available through MNsure, and a majority of them will get the aid. Because of MNsure's growth, an estimated 25,610 more Minnesotans qualify for federal tax credits than last year. MNsure estimated that the average enrollee's tax credits will be around $621 per month for 2017.

"Altogether, Minnesotans are poised to save $372 million in tax credits," said Allison O'Toole, MNsure's CEO. "That is real money for Minnesotans."

The rest aren't eligible for federal subsidies, but they do qualify for state aid under a one-time program passed last month by the Minnesota Legislature. That $310 million program will provide 25 percent premium discounts to Minnesotans who aren't eligible for federal tax credits. (This plan applies only to the individual market, not to the vast majority of Minnesotans who get their insurance from an employer.)

Under current estimates, more than 110,000 Minnesotans are set to qualify for these state-funded discounts. The roughly 41,000 on MNsure will get an average of $130 per month from the program, O'Toole said.

MARKET COULD BE IN PERIL

Even with these measures to offset rising premiums, tens of thousands of Minnesotans left the individual market.

That could be bad news for health insurers, who raised their premiums this year by more than 50 percent after paying out far more in claims than they received in premiums in 2016.

"I'm very concerned that fewer people will be buying insurance on their own than they did last year," Schowalter said. "The people who didn't buy insurance are probably the people who have the lowest medical costs, lowest medical bills, and means that fewer people will be helping pay for the really expensive care."

Minnesota's policymakers are trying to grapple with this problem, in addition to the 25 percent rebates passed last month. One option moving forward is called "reinsurance" and would see the state subsidize some of the costs of the sickest patients to try to lower cost pressures on the market as a whole.

Another idea, backed by Gov. Mark Dayton, would create a "public option" by letting Minnesotans buy into the state's MinnesotaCare plan.

Because insurers are already preparing their rate proposals for 2018, lawmakers need to pass proposals such as these in the next two months at the latest if they want to affect the 2018 market.

WORTH KNOWING

* The numbers announced Thursday reflect people who have signed up for insurance, but not all of them will actually pay their premium to activate their insurance. Final enrollment numbers released in one to two months will be lower than what was announced this week.

* Around 1,500 people signed up for insurance during the first week of February -- an extra week of enrollment beyond the normal Jan. 31 deadline.

* Of the 114,000 MNsure enrollees, 47 percent were new to the exchange, a figure O'Toole predicted would lead the nation.

* MNsure's call center received around 6,000 phone calls Wednesday, the final day of enrollment.

* Some Minnesotans can still sign up for plans. A special enrollment period runs through the end of the month for anyone whose plan was involuntarily terminated -- primarily the 103,000 Minnesotans who had Blue Cross Blue Shield plans before that carrier dropped out of the market.

* State officials urged Minnesotans to sign up early, and Minnesotans did. Only around 15,000 of the 114,000 total enrollees signed up in the final month of enrollment.

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