Today there are 30 percent fewer Minnesotans buying health insurance on their own than this time last year. While MNsure’s announcement today that 114,810 people bought these policies through the state’s marketplace, fewer purchased health insurance directly from health plans. Total enrollment is just under 190,000, down from 270,400 in March 2016.
“MNsure is getting a bigger share of a smaller pie,” said Jim Schowalter, president of the Minnesota Council of Health Plans. “While it’s great that more people are getting help from the federal and state governments to pay their monthly premiums, the fact that so few people have signed up is alarming.
“The bad news is that fewer people will be helping to pay for really high medical bills. In the past about 5,300 people (1.6 percent of those who bought health insurance on their own) needed medical care totaling $630 million,” Schowalter concluded. “I’m concerned that fewer people paying premiums will mean more problems in the future.”
Schowalter added that these numbers aren’t final and overstate the number of people who will have insurance. Historically, people drop policies after signing up. The hope is that the number who drop will decreas this year because of the help that is available to pay premiums.
Council President Jim Schowalter has been trying to figure out how to make it more affordable for people to buy health insurance on their own. Like many of us, Schowalter has friends and family members who are angry and frustrated with skyrocketing premiums. People are also afraid. Will people even be able to buy health insurance on their own in 2018. What problems need to be fixed in order to make sure people can buy insurance today and well into the future. Schowalter worked with Council members to get data to Wakely Consulting Group so they could dig deep into the numbers and help us all figure out what needs fixing.
Note: The text below has been updated to reflect the following clarification: We stated that one of Wakely’s research findings was “2017 premiums aren’t out of line when compared with the medical bills paid.” This statement is the opinion of the Minnesota Council of Health Plans and not one of Wakely’s direct research findings. As part of their research, Wakely did not examine detailed claims data that would link premiums directly to medical bills. Rather, Wakely’s research states “Nationally many insurer’s premium rates were inadequate to cover costs for 2014 and 2015. Minnesota’s premiums were also inadequate as evidenced by insurer losses. In 2017, Minnesota’s premiums are now more in line with other states.”
We don’t yet know if 2017 premiums match 2017 medical bills.
Painful health insurance premiums are merely average. But …
“Average” isn’t affordable when catastrophic medical bills are no longer widely shared.
By Jim Schowalter
It’s winter in Minnesota, and those in our state who buy health insurance on their own are feeling left out in the cold. Every month, when they pay their health insurance premiums, they feel just how expenses for medical care directly affect our daily lives. Because unlike Minnesotans who get insurance through work, Medicare, Medicaid or MinnesotaCare, most people who buy health insurance on their own also pay for it all on their own.
The angst and anger are real. Most of us are insulated from how expensive care really is, but about 5 percent of Minnesotans buy health insurance on their own and they have no protection. For the last few years, the price of insurance was mostly within reach and much lower than in other states. But in the last year, the price shot up while options for where to get care shrunk.
What changed? How can prices go up so much and options be so limited? To help us get at the root of the problem, Minnesota’s insurers asked independent health experts at the Wakely Consulting Group to dig deep into our problems. Unfortunately, the answer is not comforting.
First, Minnesota regulators and health insurance leaders miscalculated when setting Minnesota’s 2014 and 2015 premiums. We greatly overestimated how many people would buy health insurance, while underestimating how much care the people who did sign up would need. And we assumed that the federal government would make good on its commitment to reimburse insurers for unexpected medical expenses.
Those mistakes created at $500 million hole that led to the startling premium increases of 2016 and the truly shocking jump for the year ahead.
And this is the hardest part: Doubling premiums between 2014 and 2017 simply put them where they should be. About average. Not the highest in the region, not the lowest.
On average, in 2014, the premium a Minneapolis resident paid each month was $86, or 36 percent, below the regional average. For 2017, the local premium is $1 above the regional average.
We know “average” doesn’t equal affordable. Early 2017 enrollment numbers show thousands of people dropping health insurance policies. And while more people will get federal help paying their premiums this year — better late than never, I suppose — most Minnesotans are footing the bill on their own.
And this is where Wakely’s second finding is critical.
The 276,000 people who bought health insurance on their own split a $1.6 billion total medical bill in 2015. But a quarter of that bill, more than $400 million, represented care for about one-half of 1 percent of the people, just 1,600 Minnesotans. Their medical expenses averaged $250,000 each for the year, compared with about $4,300 each for all others who buy their own insurance
In the past, we had ways to help share these high medical bills. But not anymore. The bills are paid only by people who buy on their own.
Wakely’s two findings — Minnesota’s 2017 premiums are average and fewer than 1 percent of people have conditions that need extremely expensive care — pinpoint the problem policymakers must solve when the Minnesota Legislature comes together on Jan. 2.
There seems to be agreement that all Minnesotans should help care for our most vulnerable family members, friends and neighbors. How our legislators, governor — all of us — turn this consensus into reality gets at the heart of who we are — our care for each other, the kind of society we aspire to be.
The data may show that Minnesota’s problems are common, but we still have potential to be exceptionally good at finding solutions. Our community’s tradition of practical health care policy needs to be quickly reinvigorated to get at the root of the problem if we want Minnesotans to be able to buy health insurance on their own in 2018, and not be left out in the cold once again.
Jim Schowalter is president of the Minnesota Council of Health Plans.Read More
Nov. 11, 2016
Statement from Minnesota Council of Health Plans President Jim Schowalter on enrollment caps
“Blue Plus, HealthPartners and UCare continue to offer health insurance through MNsure. I encourage anyone who is buying insurance on their own to log onto or call MNsure to find out if they can get federal help paying their monthly premium.
Limiting the number of new people who can buy health insurance on their own from Medica and other companies wasn’t an easy decision for Minnesota’s commerce department or insurance companies. In fact, the decision is more evidence that our state’s individual health insurance market is broken. Changes are needed next legislative session to fix the structural problems that helped generate the premium increases and enrollment caps individuals face now.
The 2017 caps help make sure that health insurers can pay medical expenses for all their existing policyholders. The gap between medical bills and the money available to pay for those bills totaled more than $500 million in 2014 and 2015 for people who buy health insurance on their own. While the gap is expected to narrow a bit in 2016, numbers so far show for the third year in a row medical expenses will be more than the money available to pay the bills.” — Jim Schowalter, president, Minnesota Council of Health Plans
Print a PDF of the statement.
Statement on Governor Dayton’s news conference calling for state financial assistance for Minnesotans who buy health insurance on their own
“Governor Dayton and I share the same frustration.
The painful premium increases, combined with the cap on the number of people who can get policies through specific companies, are a bridge put in place by the insurance companies and commerce department to make sure Minnesotans could buy health insurance on their own in 2017. The Governor’s call for the State of Minnesota to provide financial help to people faced with paying the full price of the premiums is added support for that bridge and will help ensure people continue their policies. If healthy people drop their policies, the financial imbalance will be even bigger in the years to come.
Early in 2017, policymakers will need to adopt fixes that ensure Minnesotans will be able to buy health insurance in 2018 and the years to come. One fix is a broad-based way to support those who need the most care. For the 270,000 Minnesotans who buy health insurance on their own, monthly premiums alone can’t pay the bills. Prior to 2014, more than 1.3 million Minnesotans helped pay medical bills for people who needed expensvie care. Today just 270,000 share those expenses.
Policy changes must create a sustainable way to spread these medical bills across the most people possible, not just the small number of Minnesotans who buy health insurance on their own.
Implementing these changes is a big challenge, but Minnesotans are very good at coming together to find fair and practical solutions to big problems. We all want a health system that keeps wellbeing within reach for everyone in Minnesota.”—Jim Schowalter, president, Minnesota Council of Health PlansRead More
Statement by Minnesota Council of Health Plans President Jim Schowalter on 2017 health insurance changes for Minnesotans who buy it on their own
“Premium rate increases and enrollment caps for 2017 are fingers in the dike. Regulators and health insurers are trying to keep some options available and buy time to make critical policy changes. Today’s announcement by state regulators is more evidence that how our community shares medical expenses just isn’t working.
The problems we face as a community are bigger than health insurers or government can solve alone. We’ll have to work together. And although today’s announcement is painful, there are solutions for the future.
The 250,000 Minnesotans who are affected by today’s announcement need to watch their mail. Their current health insurer will provide details on changes to specific policies. We also urge people to go to MNsure.org in the coming weeks to find out if they can get any help paying premiums each month and to compare health insurance options available to them.
Finally, today’s announcements also included new rates for health insurance policies offered by small employers. The 2017 changes for these policies aren’t as dramatic as they are for people who buy insurance on their own. None of today’s news affects health insurance for Minnesotans who get their health insurance through work, Medicare, MinnesotaCare, Medical Assistance or other insurance offered through the state or counties.”Read More