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About those MNsure weighted rate increases

Republicans have latched onto this idea of MNsure rates being calculated by a “weighted average.”

Let’s examine that.

The weighted average assumes that the same people will renew the same policy they chose last year. If Policy A is chosen by 10 times more people than Policy B, then the increase in Policy A is more relevant.

Here is the problem with that.

The MNsure exchange is a marketplace. If the policy holder thinks that the increase in premium is unwarranted, they can shop for a new policy at a different price. The number of people renewing policies could be completely different.

So the weighted averages would then be meaningless.

Sure, you can calculate a hypothetical number from that scenario and yes, it could be valid. But using a straight average like the Commerce Department did also has merit and is just as valid a number.

Also, let me address this idea that the administration “coerced” lower rates from the insurance carriers.

Well, I sure as hell hope they did.

You have regulators for a reason. Utility rates are always subject to intervention by the utility commission. They affect the final rates. The ACA also has regulators watching insurance rates — I’m not sure they have the regulatory power that the utility regulators have, but there job is oversight on rates that gouge.

They should be offering their opinions on rates and pointing out problem areas. 

That is the whole idea in keeping rates affordable.

I know it is important and desperate for the MN GOP to keep attacking MNSure — after all, they have virtually nothing else of actual relevance to attack, but it is a convoluted one at best.

This post was written by Dave Mindeman and originally published on mnpACT! Progressive Political Blog. Follow Dave on Twitter: @newtbuster.

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Comments (5)

  1. Submitted by Thomas Swift on 10/27/2014 - 03:02 pm.

    Dave, you can spin it all you want, but the people that will be opening mail announcing double digit rate hikes are not gonna buy what you or the DFL is selling.

    Sorry, but there it is.

    • Submitted by Paul Brandon on 10/27/2014 - 03:46 pm.

      And what about

      the people who received double digit rate hikes a year ago? Two years ago?
      And the people (most likely more of them) who will be able to buy better policies for less money?
      What you are proving is that there are always losers in life; the trick is to enable more people to win and fewer people to lose.
      See today’s data (real numbers) in the NYT.
      (http://www.nytimes.com/interactive/2014/10/27/us/is-the-affordable-care-act-working.html).

      • Submitted by Thomas Swift on 10/27/2014 - 08:47 pm.

        Paul, MNSure put 144,000 formerly insured people “out on the street”; these were paying customers, people who provide for themselves. Of those, 60% chose Preferred One. Now they are in for a 60% rate hike, or will be out on the street again.

        I’d love to watch you tell them about “winners and losers”.

        The only people who are winning here, are those with their hands out, expecting others to subsidize yet another aspect of their lives. That’s not a sustainable system…just like experts have been saying from day 1.

  2. Submitted by Michael Hess on 10/27/2014 - 05:07 pm.

    The math is still relevant

    As we learned last year it can be painful for people to switch plans, which often (especially for the lower cost ACA plans include narrow networks) require you to switch providers. Note I am not saying always, there is no guarantee you’d have to switch but the odds are much higher that if you change plans you’d have to change providers than if you stay with the plan. So yes the weighted average is actually relevant and more relevant than an unweighted average. But you want to go that route, of not following plans year to year, then you need to include the PreferredOne, the plan that dropped out that was the lowest priced option – all those patients who stay with them off the exchange are facing a 60% increase, and if they abandon them and stay on the exchange they’ll have double digit increases as well. Previous analysis on this site by David Brokken said an average of 16 or 17%. So if you decide to ignore the weighting, you have to assume that that the 60% of MNSure patients who are with PreferredOne are going to stay in the exchange, no matter what they pick, they are looking at double digit rate increases, minimum.

    The question of whether the ACA or MN exchange is better or worse than life two years ago or five years ago and if these rate increases are better or worse then the free market would have wrought this sime time, the diversion discussion brought up by ACA defenders is irrelevant to the question of year over year rate changes on the MN exchange. The only question asked here is if the increases on the MN exchange are being misrepresented to make them appear lower than they are, and the answer appears to be yes.

  3. Submitted by Bruce Young on 10/28/2014 - 12:20 am.

    Confusing price with out of pocket cost

    MNSure purchasers aren’t able to buy policies for less money. The insurance company gets paid the full amount of the listed premium for each subscriber. Some people are given a subsidy from the federal government.

    What you imply is equivalent to saying grocery prices went down because food stamp spending by the federal government is higher. That’s nonsense – as anyone paying the full cost of more expensive premiums for less generous plans can attest.

    My family’s insurance with Health Partners is going up 28% next year along with an increase of $1,000 in the family deductible. The Affordable Care Act isn’t very affordable for my family!

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