The political hot potato of MNsure rate increases keeps getting hotter.

It heated up quite a bit last week with PreferredOne’s statement that its individual market subscribers would see a 63 percent average increase next year. And though PreferredOne has pulled out of MNsure for 2015, its rate increase still carries significant implications for the debate over rates for those individuals who remain in MNsure.

In fact, since nearly 60 percent of MNsure subscribers are currently enrolled with PreferredOne — which offered the lowest rates of all the providers — those nearly 33,000 Minnesotans are now faced with three options: staying with PreferredOne; moving to another provider; or slipping back into the pool of the uninsured.

And though we currently know what the average rate increase will be if an individual chooses to stay with PreferredOne, a MinnPost analysis of 2015 MNsure rates shows that PreferredOne subscribers looking to find comparable plans through MNsure are likely to face substantial rate increases in 2015 — our sample showed increases from 13 to 44 percent — though nowhere near the increase they face if they stay with PreferredOne.

Many factors affect price

Not surprisingly, the individual rate for a Preferred One customer who decides to switch to a 2015 MNsure provider — HealthPartners, Blue Cross Blue Shield, UCare, Medica, or Blue Plus — depends on a lot of different factors. The number of price points in MNsure runs in the scores of thousands: There are 46 age markers, 9 regions, 5 providers, 5 levels (Bronze, Silver, Gold, Platinum, and Catastrophic). And providers can have a number of plans within each level, from HealthPartner’s 5 Bronze and 4 Silver plans to Medica’s 15 Gold plans, 10 Silver, and 10 Bronze.

To get a rough idea of what a PreferredOne customer may encounter if they change to a MNsure provider, we considered the following slice of possibilities: comparing the lowest-cost PreferredOne plan in each of the levels (Bronze, Silver, Gold, Platinum, Catastrophic) to the comparably lowest-priced plan among the five MNsure providers. Furthermore, since MNsure divides the state into nine geographic price regions, we thought it useful to take a look at these comparisons in several regions.

We chose Region 8 (the Twin Cities metro), Region 4 (the southwest corner of the state) and Region 7 (which covers a diagonal swath of land going from Chisago County all the way up to Roseau) because they cover a wide range of the state and because comparable plans are offered in all three. This resulted in 15 scenarios comparing 2014 PreferredOne plans to 2015 MNsure plans. (See below for more information on our methodology.) 

Wide-range of potential rate increases

The percentage increase that PreferredOne customers would face in changing to MNsure providers varied in this sample from a low of 13.5 percent (Gold Plan, Region 4) to a high of 44 percent (Platinum Plan, Region 7). The percentage changes were consistent for the 30- and 50-year-old price points, varying by at most a few tenths of a percentage point (except for one case of 2.5 percent in the “Catastrophic Plan, Region 8” category).

Of the 15 scenarios, eight were between 13.5 percent and 21.5 percent; three were between 24.5 percent and 28.5 percent; three between 32 percent and 37 percent, and one increase of 44 percent (see chart below).

The bottom line: Across the three regions, a PreferredOne Silver subscriber would fare best with the switch, with a 16 to 17.5 percent increase by changing to MNsure. A PreferredOne Bronze subscriber who switched would encounter a 19 percent increase in Region 7, a 21.5 percent increase in the Metro (Region 8), but a hefty 33.5 percent increase in Region 4. The greatest increases are found at the Platinum level.

Although none of these scenarios resulted in a 63 percent increase when switching from PreferredOne to another MNsure provider, that initial 4.5 percent average increase for MNsure rates touted by the Commerce Department is looking less and less relevant to what MNsure subscribers will actually be facing.

A note about methodology: All the data used for these calculations can be found on the Minnesota State Commerce Department’s website. The 15 scenarios come from the five plan levels – Bronze, Silver, Gold, Platinum, and Catastrophic – looked at in each of the three regions, and points looked at were for 30- and 50-year-old non-smokers. One important caveat: there are a lot of subtle differences in the plans, so the lowest priced plans from the different providers will not have identical provisions.