Minnesota Holds A ‘25% Off Sale’ On Health Insurance

State officials are hoping that new rebates for health insurance shoppers will build enrollment in the state's troubled market for people who buy health plans on their own.

They're encouraging people not to delay, since open enrollment ends on Tuesday.

"Time is short," said Allison O'Toole, the chief executive of the state's MNsure exchange, during a news conference Friday at the Capitol.

On Thursday, Gov. Mark Dayton signed into law rebates for individual market shoppers who make too much money for federal tax credits, but nonetheless are facing premium jumps of more than 50 percent for health insurance.

People who sign up for individual health plans by Jan. 31 either through MNsure, or directly from insurers, will see a 25 percent discount in premium costs starting in April, state officials said. Rebates will be retroactive to January, as well.

It's likely that some health insurance shoppers were waiting on the Legislature to see if rebates would be available before deciding whether to buy coverage for 2017, said Myron Frans, the commissioner of Minnesota Management and Budget.

"The health of the market does depend on the volume," of people signing up, Frans said during the news conference. "We have been concerned that people are waiting on the sidelines. ... Our hope is that people will say: OK, with this 25 percent reduction, I can now afford health insurance."

About 5 percent of Minnesotans purchase individual health insurance policies. It's the market for self-employed people and those who don't get coverage from an employer or government program like Medicare.

Individual market shoppers were shocked in late September not just about premium hikes for 2017, but also tight limits on the network of doctors and hospitals available with health plans as well as enrollment caps at most health plans.

Insurers imposed the cost saving measures after sustaining financial losses in the market, which is undergoing fundamental change due to the federal Affordable Care Act.

The state has estimated that about 125,000 people will qualify for rebates. That includes people who make too much money for federal tax credits, which help those who make less than $47,520 annually, or $97,200 for a family of four. People at lower income levels who buy directly from insurance companies - and therefore don't receive federal tax credits via MNsure - also qualify for the rebate, state officials said.

Insurers in Minnesota reported last year that the state's individual health insurance market shrank between the end of 2015 and the second quarter of 2016. That's a troubling sign for the health of the market.

It's been tougher to get a read on the current health of the market. Sign-ups through the state's MNsure exchange have come at a record pace, as Minnesotans seek tax credits to offset premium spikes, but numbers haven't been available for the "off-exchange" portion of the market.