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Explaining MNsure, post-PreferredOne

Minnesota probably won’t have the lowest rates in the nation for premiums anymore, but double-digit increases also seem unlikely. 

Enrollees can stick with PreferredOne when it makes its exit from MNsure, but they won’t be eligible to receive any federal tax credits they qualified for when they were enrolled through the exchange.
MinnPost photo by Corey Anderson

One of the key components of any competitive marketplace is the ability for the players to have an easy exit.

That’s why Golden Valley-based PreferredOne’s decision last week to leave MNsure — the Minnesota’s health insurance exchange that’s part of the Affordable Care Act  — wasn’t surprising to most experts. PreferredOne was one of the smallest plans on the health care exchange, and it offered the lowest prices in the market, helping Minnesota achieve some of the lowest average rates in the nation. When company officials realized they weren’t making enough money, though, they decided to bolt.

But it’s election season in Minnesota, and the news was predictably filtered through the lens of partisan politics, with Republicans taking the opportunity to remind everyone that it was a Democratic administration that helped implement MNsure and its ill-conceived rollout.

For the most part, experts say PreferredOne’s decision to leave is not the political or economic disaster some have painted it out to be. Even so, the carrier’s exit still has some near and long-term ramifications for consumers currently enrolled in the exchange and the insurers still participating.

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Here’s what to expect, post-PreferredOne, as the state prepares for the next open enrollment period Nov. 15: 

What will happen to the people enrolled in PreferredOne now?
Well, the situation certainly isn’t convenient for those consumers. Anyone now enrolled in a PreferredOne plan will retain it through 2014, but they’ll likely have to enroll again in 2015 with one of the other four nonprofit plans currently providing coverage through MNsure. If they want, enrollees can stick with PreferredOne when it makes its exit from MNsure, but they won’t be eligible to receive any federal tax credits they qualified for when they were enrolled through the exchange. Also, any new plan they get through MNsure is likely to be more expensive or offer a smaller provider network. 

How many people will this impact?
A lot, but also fewer than you might have realized. Most of the 325,000 enrollees in MNsure are actually signed up for government-sponsored plans, not the private “qualified health plans” like those offered by PreferredOne. That said, of the 55,000 people who signed up for private plans through MNsure, about 24,000 were enrolled with PreferredOne as of July. 

Do people with PreferredOne know they need to re-enroll?
Probably not everyone. In order to get the word out to those enrolled with the plan, MNsure officials are planning a PR blitz before the next open enrollment period, which starts on Nov. 15. In early October, MNsure is also set to release the new rate plans. At that point, the state should have a lot more information about who was enrolled with PreferredOne, MNsure CEO Scott Leitz said. “We anticipate doing a very targeted outreach effort … to get them to re-enroll in MNsure,” Leitz told the exchange’s governing board in September.

“I think the concern right now is making sure the people who are enrolled know what their options are and that they can make a change and be ready for the new open enrollment period,” said Lynn Blewett, a professor at the University of Minnesota’s School of Public Health. “Everybody is trying to figure out who took the low cost plans and who they enrolled. The market is shaking out and people are understanding who is signing up. The existing plans will be marketing and trying to figure out who is out there.”

Is it possible people could stay with PreferredOne, but not through MNsure?
It’s possible. Because PreferredOne’s rates were so low, the federal tax credits were either unavailable or small, so some people may just choose to move off the exchange and into PreferredOne’s private individual coverage.

What does this mean for the other plans in MNsure?
Four other nonprofit carriers also offer private insurance through MNsure — Blue Cross and Blue Shield of Minnesota, UCare, Medica and HealthPartners — and none have given any indication that they plan to leave the exchange in 2015.

That said, experts say the rates could go up in those plans now that PreferredOne has left the exchange. The other plans “no longer have to think about PreferredOne’s low bid when they submit their own bids,” said Roger Feldman, a professor at the University of Minnesota’s School of Public Health. 

That means Minnesota will probably not be the lowest in the nation for premiums anymore, but double digit increases also seem unlikely. And increases probably won’t come right away in 2015, Feldman added.

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Department of Commerce Commissioner Mike Rothman is set to release the 2015 rates for the remaining plans early next week, and given the timing of PreferredOne’s decision, there’s little time to make changes (the department and other insurers involved in MNsure can’t say much now as the review process is technically underway). 

Is there an upside to this?
Yes, actually. Experts suggest that everyone who signed up through MNsure — not just those signed up with PreferredOne — take a second look when open enrollment begins in November. And not just because the technical issues that plagued the exchange in the beginning should be (for the most part) worked out by now. “The rates can change, provider networks can change; [people] should run the numbers again and make sure with the new rates and other changes these place are making, that they are still making the best choices for 2015,” said Allan Baumgarten, a Minnesota-based health care finance analyst. “Hopefully it will be a better shopping experience the second time around.”