What You Need to Know About Insurance Rate Increase

insuranceThe Minnesota Department of Commerce recently approved average premium increases for 2016 for all 5 insurers in the state’s individual market. The insurance market, MNsure, is for people younger than 65 who don’t get health insurance through an employer.

While MNsure accounts for only about one-sixth of the individual market in Minnesota, the rate increase is creating debate about the state’s exchange.

Republicans will say, “Increases are because of MNsure.”

This is a classic red herring argument, rate adjustments are determined annually regardless of the platform

Rate adjustments are determined each year through negotiations and data exchanges between Department of Commerce actuaries and insurance provider actuaries. They must be deemed to be actuarially sound in order to be accepted by the department. 

Republicans will say, “DFLers caused this.”

The Senate DFL proposed and passed a number of MNsure reforms that would have brought additional oversight and transparency to MNsure — Republicans in the House refused to pass these common sense reforms. 

And, everyone should keep these points in mind:

  • It is more important than ever for Minnesotans to shop for coverage on MNsure. There may be more affordable options, and the increased availability of tax credits will help working Minnesotans combat or completely eliminate the higher premiums.
  • The premium increases are concerning, and it’s clear that lawmakers need to assess the process by which insurance companies decide their rates. DFLers are committed to that work next session.
  • We should not overlook the promising and remarkable effects the ACA and its initiatives have had on Minnesotans:
    • Today, only 5.9% of the state’s population is without health insurance, giving Minnesota the 5th-lowest uninsured rate in the nation.
    • Hospitals and clinics are seeing positive outcomes from the ACA, as they saw a 22.4% ($34.6 million) drop in charity care – care completed without an individual being able to pay. This is only the 2nd time this number has not risen year-to-year since 2001.
  • While premiums for MNsure plans are increasing in 2016, these plans offer a more comprehensive benefit package and ensure Minnesotans are getting coverage for the care they need.
    • The individual market increases announced today only affects roughly 5.5% of Minnesotans, and don’t include those who receive coverage from their employer, MinnesotaCare, Medicare, or Medical Assistance.
  • DFLers are committed to continuing to work on MNsure to keep Minnesota’s premiums among the lowest in the nation, control the large annual increases in the future, and allow the positive outcomes, such as lower rates of uninsured, to continue expanding.