MN insurers seek big hikes in single, family health plan premiums

Updated: 9:18 p.m. | Posted: 5 p.m.

Minnesota health insurers are proposing hefty average premium hikes next year for plans sold to individuals and families.

Blue Cross Blue Shield of Minnesota's HMO, Blue Plus, is seeking hikes ranging from 36 percent to 67 percent. HealthPartners proposes average increases of 43 percent and 51 percent. UCare's average is 66 percent.

Medica is seeking 59 percent, and PreferredOne wants an average of 63 percent more for an individual plan with children's dental coverage.

These are not the final increases. The state commerce department will issue the final approved rates at the end of the month.

And whatever the final rates, they affect only a small portion of Minnesota's population, a majority of which has employer-sponsored health coverage.

MNsure CEO Allison O'Toole said that it's worthwhile for Minnesotans who buy insurance on the state health exchange that she runs to check out the latest prices.

"It's counterintuitive," she said, "but when rates go up, so does the value of tax credits. So people who weren't eligible this year might be next year, and they might be getting more. Those tax credits can be really important in a year when we're seeing significant rate increases again."

Several companies' filings indicate they lost millions of dollars last year, but none on the scale of Blue Cross Blue Shield of Minnesota, which says total losses over three years will be close to $500 million.

Blue Cross, the parent company, is withdrawing its namesake insurance firm, the largest in the state, from the individual market.

On a combined basis, Blue Plus and Blue Cross saw a huge 34 percent spike in claim from the first quarter of last year to the same period this year.

"I am alarmed by the drastic increases in health insurance rates for Minnesotans in the individual market, which are also occurring in many other states under the Affordable Care Act," said Gov. Mark Dayton in a statement. "Fortunately, many individuals, who purchase their insurance through MNsure and qualify for the federal tax credits, can offset most of the listed rate increases."

Dayton said he will reconvene his Task Force on Health Care Financing, which previously reviewed the state's health insurance system, and ask its members to look at the individual market again.

In a sign that the rates may not stabilize any time soon, both Blue Cross and HealthPartners say the health status of people covered under individual and family health plans is getting worse.

Minnesota Council of Health Plans President Jim Schowalter says insurers are paying out far more in expenses than they're collecting in premiums.

"It is a problem that's bigger than I think any one health plan or the doctors or hospitals or even government agencies can figure out," Showalter said. "We kinda have to do it together."

UCare acknowledged its 66 percent average increase for 2017 is significantly higher than this year.

The unfortunate reality is that our members' medical and pharmacy needs were costlier, and medical service use was greater than when rates were set in previous years," Ghita Worcester, UCare's chief marketing officer, said in a statement.

Worcester said UCare could have simply withdrawn from the market but chose instead to treat 2017 as a "bridge year," providing coverage while "working with industry leaders to identify and implement 'fixes' to help stabilize this market for the future."

The final 2017 premium rates will be public September 30, but will not appear on MNsure's website until mid-October.

Editor's note (Sept. 2, 2016): This story has been modified to clarify when the new rates will be available on MNsure.org.