Individual market costs remain steady because of reinsurance program

July 08--BEMIDJI -- Action taken by the Minnesota Legislature is managing to keep health insurance costs in the individual market lower both regionally and statewide.

According to a press release from the Minnesota Department of Commerce, premiums for Minnesotans in the individual market are about 20 percent lower on average than what they would've been without the state reinsurance program. The program, titled the Minnesota Premium Security Plan, was created by the Legislature to cover high-cost medical claims incurred by health plans in the individual market.

"What happened in 2016 and 2017 was a significant number of rate increases by the insurers. There were also very serious concerns that health insurance was becoming more unaffordable and also that insurers wouldn't stay in the market," said Ross Corson, Department of Commerce Communications Director. "In response the Legislature enacted the reinsurance program and authorized funding for it for two years."

In both 2018 and 2019, the Legislature authorized up to $271 million for the program. Additionally, the state has also received a waiver from the federal government to help with implementation. According to Corson, the waiver allows the federal government to fund about 40 percent of the program costs.

Last month, the 2019 proposed rates by the insurers were submitted to the commerce department. Corson said throughout the rest of the summer, the department will review the proposed rates filed and the final approved rates for 2019 will be announced by Oct. 2. The open enrollment period for those who buy on the individual market, which amounts to about 4 percent of Minnesotans, starts Nov. 1.

According to Corson, the state as a whole is divided into several rating areas, with Beltrami County in Rating Area 7. In total, Rating Area 7 includes 14 counties, extending north to Roseau, south into Hubbard and Cass Counties and southwest to Aitkin and Chisago Counties.

Because of the reinsurance program, rates for Rating Area 7 between 2018 and 2019 are proposed to have:

--A 12.51 percent decrease for Blue Plus plans.

--A 17.16 percent decrease for Medica plans.

--A 9.04 percent decrease for UCare plans.

If the program wasn't implemented, Corson said the effect on rates in Rating Area 7 would be:

--A 4.01 percent increase for Blue Plus plans.

--A 3.63 percent increase for Medica plans.

--A 10.88 percent increase for UCare plans.

As an example, Corson said in Rating Area 7, the average lowest premium from Blue Plus with the reinsurance plan for a 40-year-old individual would be $327.60. Without the program, the premium would be $389.47.

Because the program was only funded for two years, Corson said the Legislature will need to revisit the matter during the 2020 session to decide its future. The federal waiver, though, is good for five years, Corson said.

___

(c)2018 The Bemidji Pioneer (Bemidji, Minn.)

Visit The Bemidji Pioneer (Bemidji, Minn.) at www.bemidjipioneer.com

Distributed by Tribune Content Agency, LLC.