Reinsurance would preserve MNsure choices, but few will see premium drops
The state
The release cheered consumers who've endured several years of double-digit premium jumps by reporting some rates might actually decline thanks to a state "reinsurance" program, which is designed to provide a financial cushion for health plans that happen to enroll people with high-cost health problems.
Reinsurance would lower premiums, but insurance agents say consumers likely won't see the savings in the form of outright premium declines, because one-time rebates will be going away at the same time.
"In the current environment, very few people pay the full premium," said
About 170,000 state residents buy coverage through the individual market, which has been highly volatile under the federal Affordable Care Act (ACA). After the state's individual market nearly collapsed last year, state lawmakers created a one-time 25 percent rebate program for many consumers in 2017, plus the reinsurance program that's scheduled to start next year.
Insurers in
While this is good news for individual market consumers, insurance agents say, it also could be confusing. That's because the rebates, which currently are subsidizing about 100,000 consumers in the market, will switch off in January just as the reinsurance impact would kick in.
Commerce reported last week that with reinsurance, consumers could see 2018 premium rates that are anywhere from a 15 percent decline to an increase of 10 percent compared with 2017 rates. The 2017 comparison rate, however, did not factor in the 25 percent rebates.
"If they're currently getting a 25 percent discount, and then they read the news that says the premiums might go down 10 percent -- they actually could be paying 15 percent more next year," said
As Haberman, the insurance agent in
Individual market consumers who aren't getting rebates are being helped by federal tax credits under the ACA that effectively cap out-of-pocket premium costs. So, since they aren't paying the full premium now -- and presumably still won't in 2018 -- they likely won't see changes in their monthly bill due to reinsurance.
"If their income and household size doesn't change, the amount they pay the insurance company doesn't change," Haberman said.
Earlier this year, lawmakers decided to spend up to
On Tuesday, Republican leaders in the state
"Premiums will remain flat or decrease for thousands of Minnesotans," wrote House Speaker
The HMO from
Reinsurance at
All the talk about rates is somewhat premature, since Commerce is currently reviewing the proposals. Final numbers could be different when they are released by
Besides, the real benefit from reinsurance is not simply about rates, but encouraging health insurers to compete in the market, said
"Absent reinsurance," Schneeman wrote in an e-mail, "there is a reasonable chance that there is no viable marketplace at all under the ACA rules."
Twitter: @chrissnowbeck
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