In the Pioneer Press there is an article about MNsure and the variations in premiums for the various regions.
There has been some criticism about rural vs. urban costs. And although some of it is justified, there is an important point to keep in mind:
This is not a new phenomenon.
As the article indicated:
“The premiums are reflective of those differences that we see from one local market to another,” said Matthew Eyles, (executive vice president of Avalere Health). “The differences have always been there. … The health exchanges just sort of highlight more acutely those differences.”
The highlight emphasis is mine because I don’t think a lot of people realize this. These regional differences have always existed; they have just been hidden by HMO contracts throughout the various geographic areas.
As a personal example, my wife began treatment at Mayo Clinic. When I moved to the metro area and examined my new insurance, we found that Mayo Clinic was out of our network and that if we continued to go there our out of pocket expenses would increase dramatically. A year later, my employer changed insurance and Mayo Clinic was back in the network.
As noted in the article regarding MNsure, Rochester (and Mayo Clinic) is in region one and has the highest premiums. This has always been the case. One of the reasons for this is that Mayo is one of the few facilities that so dominate their market that they can pick and choose the contracts they will accept — and even negotiate higher reimbursements in some cases.
Over time this regional difference has grown and because of MNsure there is some transparency in how these end products are affected.
(I would like to note that one of the remedies to all of these issues would be a single payer system. If your market is everybody, then everybody gets the same treatment, benefits, and costs. And the system will be more stable.)
This is not really a problem due to MNsure at all. It is a problem that results from dealing with the same insurance system that was in place before. What the ACA is doing here is forcing insurance companies to a slightly higher standard of care. No pre-existing conditions. Coverage of children to 26. Closing the Donut Hole on RX drugs. These mandates are going to cost more but because (almost) everyone is required to be covered, the costs can be spread around — as they should be. But until we get to a point that tells us how much these changes will affect rates, we cannot know for certain.
A lot of people have been surprised at how low the initial rates have been. This could be a result of the insurance companies wanting to grab as big a piece of this new market as they can, or it could be that for the present, they are just taking educated guesses as to how the new mandates and expanded market will affect costs going forward.
Rural areas have logistical problems. There are geographic issues, competitive issues, market issues; all of them make rural medicine problematic.
And again, single payer would be the answer to all of it. Obamacare did not change the logistical issues for rural coverage. It attempts to even some of it out but because it relies on the same insurance coverage system that we currently have, the disparities will still exist.
MNsure didn’t cause these premium disparities; MNSure allowed for the transparency that reveals them.
Still, hopefully, we can keep improving this.
And again, improvement would best be achieved by single payer.
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