PreferredOne pulls out of MNsure

MNsure Board Chair Brian Beutner
MNsure Board Chair Brian Beutner addresses the media in regards to PreferredOne dropping out of its exchange with MNsure CEO Scott Leitz standing by his side, Sept. 16, 2014 in St. Paul, Minn.
Bridget Bennett / MPR News

The insurer with the lowest rates and most customers on Minnesota's health care exchange is pulling out.

Golden Valley-based PreferredOne this morning confirmed its exit from MNsure. It comes as a major blow to the exchange — the next open enrollment period starts Nov. 15 and runs through Feb. 15.

MNsure officials said the online insurance exchange would reach out soon to PreferredOne customers who bought coverage through MNsure last year with information on next steps.

They said consumers still have at least four, well-known, Minnesota-based carriers "who are committed to providing important health coverage" to everyone, including people who qualify for tax credits and public programs.

"We encourage all Minnesotans, including those who are currently enrolled in a preferred one plan to come to MNsure to shop, to compare, to ensure that they're getting the best coverage for the lowest price," MNsure CEO Scott Leitz said.

PreferredOne spokesman Steve Peterson told KSTP that continuing to offer insurance through MNsure is "not administratively and financially sustainable."

PreferredOne is owned by Fairview Health Services, North Memorial Health Care and PreferredOne Physician Associates.

According to a company statement, MNsure policies make up only a small percentage of PreferredOne's entire enrollment but take up a significant amount of resources to support.

PreferredOne had 59 percent of the individual market for MNsure enrollees as of Aug. 6.

Minnesotans currently enrolled in Preferred One are covered through their existing plan for the rest of 2014.

State law gives those consumers the right to renew their existing coverage for 2015. But the law doesn't guarantee it will be offered at the same price, MNsure noted.

Any PreferredOne customers who stay with the insurer will not be eligible for federal insurance subsidies because they are available only to people who enroll through MNsure.

PreferredOne's pullout quickly became a political issue Tuesday.

"Six out of 10 people who've purchased insurance through MNsure will now have to go through the nightmare process of purchasing another plan all over again, thanks to Mark Dayton," said Jeff Johnson, the GOP candidate for governor.

Minnesotans, he said, are "paying the price for Mark Dayton's incompetence."

The Associated Press contributed to this report.

Related coverage:
• January 2014: Dayton takes responsibility for troubled rollout
• July 2014: GOP candidates for governor want MNsure changes
• August 2014: Health care success forces Uptown clinic to close

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