Extreme heat warning in effect through Sunday

MPR News helps you turn down the noise and build shared understanding. Turn up your support for this public resource and keep trusted journalism accessible to all. 

Turn Up Your Support

Blue Cross and Blue Shield of Minnesota's individual and family health plans sold to people who lack coverage through employers are popular offerings. They are also money-losers on a grand scale.

Blue Cross delivers major blow to health reform

Blue Cross this week said it was on track to lose $500 million on individual coverage over three years. That cash hemorrhage was the main reason the company announced it was pulling back on nearly all its offerings for people who buy insurance on their own, outside of work. 


The decision means some 100,000 Minnesotans will be looking for new health insurance plans for next year.


Experts say the move mirrors a national trend. The plans attract too many high-cost consumers, forcing insurers ultimately to boost premiums, eat the losses or bail out.


Blue Cross will continue to sell more limited offerings on the individual market through its Blue Plus HMO. But the options offered won't come close to what's been offered to date.


"They could not keep asking for 50 percent premium increases, which was their average increase last year, and expect that people would stay in the plan," said University of Minnesota health economist Roger Feldman.


The Blue Plus HMO plans that will remain will be less costly to run but likely more restrictive in their choice of clinics and hospitals, he added. 

 
"In order to save money and hold premiums down, we're going to have to accept less choice than we were accustomed to," Feldman said. "In terms of shopping for health plans, it will mean that people have to do a more careful and thorough job to make sure that the providers they want to see are part of that plan's network." 


About 300,000 Minnesotans without coverage through their employers buy insurance on the individual market. Feldman said he expects people will find coverage through remaining Blue Cross plans and plans provided by HealthPartners, Medica and other insurers.


Allison O'Toole, CEO of MNsure, Minnesota's government-run health exchange, said people who have to buy health insurance on their own should do their shopping on the agency's website. Qualifying persons can get subsidies on premiums -- and that's the only way for qualifying people to get a subsidy. 


Over three years, people buying insurance through MNsure have received $81 million in tax credits, O'Toole said. MNsure can help people find their best options, she added. "We're ready to help and very happy to help. We want this transition for consumers to be smooth."


It's not yet known which carriers will be offering plans for the individual market next year. Insurance giant UnitedHealth Group is leaving all but a handful of state exchanges next year, including Minnesota.


Despite the move by Blue Cross, state Sen. Tony Lourey, DFL- Kerrick, said health care reform is proceeding fairly well.


"I understand their business decision.  I think that it's unfortunate," he said of Blue Cross. "But I do think there are still valuable, quality products available for individuals who will need to make a transition."


Lourey, who had a lead role in creating MNsure, noted Minnesota has the second lowest rate of people without health insurance and relatively low health insurance rates for people buying insurance on their own.


MNsure opponents, though, see the Blue Cross decision as more evidence that health care reform is failing. 


"I think it's another example of Obamacare and MNsure in Minnesota making things unaffordable for middle class families and now the insurance companies are unable to provide a product at any price," said state House Health and Human Services Finance Committee Chair Matt Dean, R-Dellwood. "There's really not going to be very many options left for middle-class Minnesotans who want to shop for insurance."


Carriers have to find a way to make a profit if they're going to remain in the individual health insurance business, and so far that's been hard to do. 


It looks like there'll be fewer insurers offering health insurance in the individual market nationwide, said Cynthia Cox, associate director of health reform and private insurance at the Kaiser Family Foundation.


"That's been a cause for alarm for some people," she said, "because the hope was that these markets would be encouraging exchange competition and more insurers to come in."

Business and Economic News

Health

Martin Moylan

Author

Blue Cross and Blue Shield of Minnesota's retreat from individual and family coverage reflects a national trend. Experts say the plans attract too many high-cost consumers, forcing insurers to boost premiums, eat losses or bail out.

Buying health coverage outside work? Get used to less choice

Go Deeper.

Like this?