ST. PAUL, Minn. — State regulators announced Monday that Minnesota residents who buy health insurance on their own may see slight premium hikes or even some price drops next year — a welcome break from several years of double-digit increases that hinges on federal approval of a new state program to control health insurance costs.
The preliminary rates set the stage for premiums on the individual market in 2018 that range from a nearly 15 percent decrease to an 11 percent increase. Those premiums may change when rates are finalized in early October, and will vary widely based on the age, location and plan for individual residents.
Many residents won’t see a decrease even if the sticker price of their plan drops, because a one-time, 25 percent discount for shoppers who don’t get federal subsidies won’t carry over into 2018. Open enrollment for choosing plans begins Nov. 2.
Fresh off premium hikes as high as 67 percent for 2017, state lawmakers and Gov. Mark Dayton celebrated the lower rates as a sign of stabilization. It comes less than a year after the state’s top insurance regulator, Department of Commerce Commissioner Mike Rothman, warned Minnesota’s health care marketplace was in a “state of emergency” after a near-exodus of every insurer selling plans directly to consumers.
“We know Obamacare’s impact is still hurting Minnesota families, but we’re proud to take initial steps toward stabilizing the market, lowering costs, and successfully keeping all insurers in the individual market for next year,” Republican House Speaker Kurt Daudt said in a statement.
Those lower premiums are due in large part to a new, two-year $542 million reinsurance program created by lawmakers this year to help offset insurers’ heavy losses. But the federal government has not yet approved the program nor agreed to pick up at least one-third of the tab. Rothman said Monday he hoped to secure that approval by late August.
Without the federal sign-off, insurance companies would post across-the-board increases, ranging from 3 percent to as much as 31 percent.
Dayton, who criticized the reinsurance program as too expensive with no guaranteed payoff, called the rates “tremendous news” but used the announcement to press the federal government to give approval and help out.
“We will be hard-pressed to continue to provide those subsidies alone. It is essential that the President and the US Congress act now to share this responsibility in the years ahead,” he said in a statement.
The stabilizing rates come amid massive uncertainty about what the stalled efforts in Congress to repeal President Barack Obama’s health care law may mean for a state that embraced the Affordable Care Act.
Minnesota is one of just a dozen remaining states running its own health insurance exchange and one of two to offer a so-called Basic Health Plan to lower-income residents. Dayton and fellow Democrats touted Minnesota’s insurance rates as the lowest in the nation in 2014.
But by 2017, shoppers stomached consecutive years of double-digit premium hikes and watched as offerings dwindled — two major insurers have exited the marketplace since 2015. Dayton declared last year that the Affordable Care Act “is no longer affordable for increasing numbers of people,” and lawmakers scrambled to rescue residents who don’t qualify for federal subsidies with a 25 percent rebate for 2017 coverage.
Geoff Bartsh, vice president and general manager of individual and family business for Medica, said 2018’s rates reflect a sense that insurers are starting to get a better handle on the unpredictable marketplace. Medica is one of a handful of companies selling coverage directly to individuals.
“We’re not seeing the wide variation in rate increases. I think what that speaks to is that in some sense, there’s a little bit of leveling out in the market,” Bartsh said.