Thank you for the many conversations we have had about moving Minnesota forward, As I have been knocking on your doors to listen to the issues important to you over these past months, many of you have expressed a concern about health care costs. In response I contacted the Commissioner of Commerce to encourage careful scrutiny in any rate insurance increases, and the Commerce Department spent considerable time in this effort.
Yesterday the Department of Commerce released the 2016 insurance company rates for individual and small group health plans. I was extremely disappointed by the unacceptably high rate increases on some plans, and I’ll be looking for ways to improve the individual insurance market in Minnesota and make insurance more accessible and affordable.
Most Minnesotans will not be effected by yesterday’s announcement, including those who are covered by larger employer-based insurance or public programs like Medicare, Medicaid and MinnesotaCare. About 5.5 percent of Minnesotans purchase individual policies, while about 5.4 percent get coverage from small group policies.
For insurers in Minnesota, the final average rate increases for the individual market will range from 14 percent to 49 percent, compared to the 2015 rates, which were the lowest in the nation. In Minnesota’s small group market, which provides coverage to businesses with two to 100 full-time employees, the final average rate changes for 2016 range from a 12.6 percent decrease to a 5.6 percent increase.
While I was disappointed by the rate increases on some plans, I was encouraged by the fact that Minnesotans will still have the lowest rates of any of our neighbor states in the Midwest and among the lowest in the nation overall. Also, more Minnesotans than ever will qualify for federal tax credits available through MNsure to lower the cost of their health coverage. One of the most important take-aways of today’s announcement was the need for individuals to take a little time, maybe as little as 20 minutes, to shop around to ensure we’re purchasing the most affordable plan.
It is worth taking the time to reassess your current health insurance coverage to see if more affordable plans with equal or similar coverage are available to you. MNsure staff have put considerable time and effort into new comparison tools for consumers that will be unveiled in the coming month to compare health plans when open enrollment starts on November 1, 2015. Again, it’s worth shopping around. With increased access to tax credits for health coverage, you may qualify for more affordable coverage than you currently hold. Only policies purchased through MNsure qualify for the federal assistance.
In addition, I was encouraged by the Commerce Department’s commitment to reforming the way insurance rates are set and reforming the entire insurance market itself in Minnesota. Commissioner Mike Rothman addressed reforms that are needed to help stabilize insurance company rates in Minnesota’s individual market in coming years, and I look forward to working with the department and other legislators of both parties who are addressing ways that these issues can be solved.
Some of those reforms include possible new state-level tools to stabilize rates in the future like risk adjustment mechanisms to spread the financial risk that insurers bear when they havemore high-cost enrollees; reinsurance to provide a backstop so an insurer does not incur deep losses from a large number of costly claims; and policies to foster price transparency and cost competition among insurers and providers.
I’ll be paying close attention to the work of my colleagues on the Minnesota Health Care Financing Task Force when they take up these issues. I’ll also be paying close attention to the task force’s findings on what insurance providers are doing to examine their reserves, profits, and leadership compensation. The task force will also be examining the potential benefits of combining both the individual and small group insurance markets.
For more information on the rate review process and health insurance in Minnesota, including a 2016 rate summary, please visit the Commerce Department’s rate review webpage.
I’ll be sure to keep you up to date, but please don’t hesitate to send your questions or concerns. I value your input and I appreciate hearing from you. I will continue to go to your doors during these autumn months, and look forward to more conversations on issues important to you and your families.