PreferredOne customers will face rate hikes on MNsure. How much? A lot less than 63% — and a lot more than 4.5

Original image: CORBIS/Corey Anderson

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).

Region 4Region 7Region 8
(Metro)
Bronze Level33.5%19.0%21.5%
Silver Level16.0%16.5%17.5%
Gold Level13.5%26.5%28.5%
Platinum Level20.5%44.0%37.0%
Catastrophic Level32.0%24.5%14.5%

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.

Comments (51)

  1. Submitted by julie moore on 10/23/2014 - 11:38 am.

    They aren’t the only ones!

    I work for a company that provides insurance so don’t use MN Sure. Our rates are going up with HealthPartners and the policy is not as good as it was last year. If I kept similar coverage which currently has a $25 copay (this is changing next year to $30 copay + 5% of all services) my rate will go up 23.8%. If I move to our HSA the program is moving from a $2500/5000 deductible to $3000/6000 and the rate will go up approximately 18% over last year. I talked with a friend who lives in Nevada and his rates are doing the exact same jump.

    Just sayin’ we can’t blame MnSure!

    • Submitted by Todd Hintz on 10/23/2014 - 12:34 pm.

      Rates

      Julie, thanks for the data. My eyes crossed just trying to follow the bouncing ball between copays, deductibles, and HSAs. I couldn’t help but think that this would be so much simpler with a universal single payer plan.

      -No copays
      -No deductibles
      -No out of network doctors or hospitals

      Everybody in, everybody pays, everybody benefits. Less paperwork for hospitals and doctors too as they only have one plan to administer. Just find a doctor and clinic you like and go for it.

      • Submitted by Joel Fischer on 10/23/2014 - 02:07 pm.

        Except the poor

        They won’t have to pay. They don’t even pay taxes as it is.
        NO WAY we can do universal single payer.

        Please see this for the sarcasm it is.

    • Submitted by Harris Goldstein on 10/23/2014 - 05:53 pm.

      But I’m sure someone will blame Obama for that too.

      • Submitted by John Appelen on 10/23/2014 - 11:19 pm.

        That is me

        Who do you think is paying the medical device tax, the extra ACA administration costs, the extra costs to cover those with pre-existing conditions, costs to have insurance to age 26 on parents plan, etc?

        Of course, they show up in our premiums… Who did you think was going to pay for all these new perks?

  2. Submitted by Mike Downing on 10/23/2014 - 02:35 pm.

    Name an efficient & cost effective govt program…

    Please name an efficient & cost effective federal govt program. Most liberals point to Medicare. However, Medicare allows huge geographic discrepancies. For example, the average cost in the Twin Cities is $6700/Medicare patient but over $14000 in Miami. Our federal govt simply does not understand cost control.

    • Submitted by jason myron on 10/23/2014 - 04:40 pm.

      You’re dismissing the demograpic disparity between the

      You’re dismissing the demographic disparity between the two. Over 24% of the population of Miami is 65 and over. That number is only 13.9% in the Cities as of 2013. More people in the local system translates to higher overhead. It looks like our federal goverment understands that higher demand means higher cost.

      • Submitted by Mark Kulda on 10/29/2014 - 12:31 pm.

        It’s not just the demographics

        You are not considering the fact that the re-treatment rate is Florida is much higher than Minnesota, where it is among the lowest in the country. Not only do Florida providers have to provide treatment to a more elderly (and sick) population but when they treat they get it wrong more often which leads to re-treatment. Since they get more procedures to bill for when they have to re-treat there is no incentive to get it right the first time. Minnesota providers have a very clear history of doing high quality work that is done right the first time. And, they get penalized for it because they don’t get as high a reimbursement rate. This is wrong. We should be highly encouraging treatment that is done right the first time.

    • Submitted by John Ellenbecker on 10/23/2014 - 05:30 pm.

      Your numbers

      don’t mean that Medical isn’t efficient or cost effective. And I suspect that you will dismiss another example – but can Fed Ex or UPS provide daily universal mail delivery for 49 cents per letter? Take a letter down to Fed Ex and see what 49 cents will get you.

    • Submitted by Pavel Yankovic on 10/24/2014 - 07:50 am.

      I can name one!

      The IRS.

  3. Submitted by Todd Hintz on 10/23/2014 - 03:59 pm.

    FIFY

    Please name an efficient and cost effective private program. Most conservatives point to HealthPartners. However, HealthPartners allows huge pay discrepancies. For example, the average pay of an executive is in the millions, whereas the average employee only gets $42,000. Our private sector simply does not understand cost control.

    Joking aside, no one is claiming government programs are perfect. But at the same time, let’s not pretend the private sector is all rainbows and puppydogs either. Private sector administrative costs are typically 30%, whereas Medicare is about 3%. That’s a huge cost savings right there.

    Not to mention that if the private sector health insurance was so great, we wouldn’t have needed Obamacare and single payer in the first place. Instead we got saddled with enormous price increases, people who were denied coverage, dropped from existing coverage, and saddled with crippling debt when they did get sick.

    Is that really what you want to go back to? If not, what is your solution for fixing the problem?

    • Submitted by Margaret Houlehan on 10/24/2014 - 08:01 pm.

      Republicans have none

      And they continue to “forget” that Obamacare was a Heritage Foundation proposal in the 1990’s.

    • Submitted by Mark Kulda on 10/29/2014 - 12:34 pm.

      You do know who does Medicare’s administration right?

      Medicare’s administration is done by a third party private business. You knew that right? If I remember correctly, the company is in Maryland and has about 500 employees. It is not done by the Federal Government bureaucracy.

  4. Submitted by Bill Coleman on 10/23/2014 - 04:08 pm.

    Preferred One

    Two points: Can anyone name an executive with Preferred One? They definitely underpriced their product last year and seemingly lost lots of money. Now they are whipsawing their customers with huge price increases and by changing sales channels. One question: Did the management of Preferred One get bonuses last year for doing an extraordinary job? Funny, I went to the Preferred One web site – could not find a board members list, executive team list, nothing relating to annual reports, etc.

    Second, today I saw an article in the Strib pointing blame at state officials for asking Preferred One to cut their prices last year. I hope state officials keep asking the insurers to do so, but it is up to the insurers to determine their prices in this competitive marketplace, not the state.

    • Submitted by Joseph Skar on 10/24/2014 - 09:23 am.

      Information

      Bill – If you Google Preferred One CEO you can find your data very quickly. For more detailed information on basically any non-profit http://www.guidestar.org. It is a great resource and it free to register. If you go to the 990 you can find all the board member and executive compensation information you need. You should however attempt to do the same for BCBS of MN before passing judgement.

  5. Submitted by Shannon Bullock on 10/23/2014 - 04:53 pm.

    Let’s not forget the QHP tax credits

    It looks like this cost comparison was done without factoring in the that the MNSure plans are also QHP (federally qualified health plans) and therefore most people who purchase them will qualify for both the tax credit and the cost sharing subsidies, and also most people will not see a year over year cost increase because the dollar amount of subsidies has also increased this year. This is a a huge advantage over buying a private plan and the reason I will be discontinuing my PreferredOne plan and going back to MNSure for another QHP. You can’t beat 0 copays and coinsurance.

    • Submitted by John Appelen on 10/24/2014 - 01:02 pm.

      T2

      Subsidies do not reduce the cost of insurance.

      It just means that another tax payer other than the beneficiary of the policy is paying the bill.

      • Submitted by Margaret Houlehan on 10/24/2014 - 08:03 pm.

        Slowly

        And state-by-state, beginning with Vermont, the US will finally join the rest of the industrialized world and go for Single Payer. Big In$urance is a cancer who must go.

      • Submitted by Margaret Houlehan on 10/24/2014 - 08:05 pm.

        We all do pay

        One way or another. Might as well get everyone covered. I’d rather pay taxes for that then another war for Halliburton. Not only is it the humane and civilized way to do things, it is cheaper.

        • Submitted by John Appelen on 10/25/2014 - 07:09 pm.

          Women and Children

          I think the women and children in Afghanistan would disagree.

          • Submitted by Matt Haas on 10/27/2014 - 09:04 am.

            I think

            That women and children HERE might. Funny thing is, the only one saying it must be either/or is you.

            • Submitted by John Appelen on 10/27/2014 - 10:30 am.

              Here vs There

              Here women and children have food shelves, medicare, free education, emergency rooms, housing assistance, food stamps, freedom, job opportunities, planned parenthood, birth control, rule of law, etc.

              Are you really going to say things are bad here as compared to life under the Taliban?

              Personally I think the “anti-war” / “spend money here” folks are the either/or group. We spend a small fortune here “fighting poverty”, yet they just want more spent here and less there.
              http://www.washingtonpost.com/blogs/wonkblog/wp/2014/01/12/no-we-dont-spend-1-trillion-on-welfare-each-year/

              That small fortune is apparently somewhere between $300 Billion and $1 Trillion per year depending on what one includes in the bucket.

              • Submitted by Jim Boulay on 10/31/2014 - 09:56 am.

                Article link

                This article totally debunks what youn are arguing on the thread!

                “But we can’t have a productive conversation unless we make it clear what the government is, and is not, doing. And it is spending a lot less on welfare than conservatives claim, and getting fantastic results for what it does spend.”

  6. Submitted by Pavel Yankovic on 10/23/2014 - 05:16 pm.

    So much…

    fot the “Affordable Health Care Act” being affordable. Another little secret is that it doesn’t make anyone any healthier either.

  7. Submitted by John Ellenbecker on 10/23/2014 - 05:32 pm.

    Single payer

    is the simple answer. Open Medicare to everyone, the infrastructure is already in place.

    • Submitted by Mark Kulda on 10/29/2014 - 12:41 pm.

      The only problem with that it…..

      that the providers of medical care will not go for it. Medicare already underpays treatments so much that they don’t even cover the actual cost of providing the care. Right now, those underpayments are ‘cost shifted’ to those that do pay (insureds and cash payers). So if the system were to evolve to ‘everybody is on Medicare’ who would pay the difference?

  8. Submitted by James Hamilton on 10/23/2014 - 07:41 pm.

    Look at the insurer’s drug formulary.

    Every insurance plan has a list of drugs it covers, may cover, and never covers, its formulary. I failed to compare my list of current prescriptions with the formulary of the insurer I selected earlier this year, Preferred One. My bad.

    I found that one of my primary diabetes medications received only partial coverage, leaving me with a $400+ co-pay per month. A manufacturer’s discount program reduced that to $266, still a hefty amount. Another drug was not covered under any circumstances. Because it costs almost $40 per tablet at retail I’ve elected to forego its use. My former plan covered both, the first at my normal co-pay, the second at a higher but manageable co-pay of $6 per tablet.

    Fortunately, my higher co-pays count toward my annual out of pocket limit. The more than $6,000 premium difference between the two plans was substantial enough that we’ll still come out ahead this year, though not by as much as we’d anticipated. I’m currently waiting for the 2015 shoe to drop.

    • Submitted by Todd Hintz on 10/24/2014 - 08:44 am.

      Payments

      You just made a good case for universal single payer coverage. No co-pays, no out of pocket limits, and all drugs are included.

      • Submitted by John Appelen on 10/24/2014 - 08:28 pm.

        Really

        So you want a single payer system where hypochondriacs can come in and be treated for the smallest ailment with no personal cost?

        Where people can demand expensive tests and procedures with no personal costs?

        Have you learned nothing from health insurance plans that used to do this?

        The premiums were very high because people simply did not have any skin in the game.
        Who is going to pay these higher premiums for this care that isn’t necessarily required?

        • Submitted by jason myron on 10/24/2014 - 11:57 pm.

          Yup…I sure do

          If it’s good enough for the rest of the civilized world, it’s good enough for us.

        • Submitted by Todd Hintz on 10/26/2014 - 09:34 pm.

          Health Care

          People always have skin in the game: it’s called their skin. And their heart, lungs, limbs, and the rest of their body. They have a vested interest in getting and staying healthy.

          • Submitted by John Appelen on 10/27/2014 - 07:37 pm.

            I Agree

            And if there are no personal costs incurred or mandated limits,
            Why would anyone delay going to the clinic to see if it passes in a few day?
            Why would anyone live with some minor discomfort as they age?
            Why would anyone not pursue every treatment or test possible?

            Do you really think that deductibles, co-pays and limits are there for the benefit of the insurance companies?

            Please remember that their actuaries don’t care what is in the agreement, as long as it is defined. Deductibles, co-pays and limits are there as an effective cost control mechanism so that premiums can be kept lower… Why else do you think you pay more for insurance if you keep lower deductibles?

            The insurance companies would earn the same profit by raising premiums, having no limits, deductibles or co-pays. However we are happy to share some of the risk to keep premiums lower.

            • Submitted by Matt Haas on 10/28/2014 - 12:30 pm.

              Boy

              Spoken like a true reactionary. Ever the oldie but goodie “an ounce of prevention is worth a pound of cure”? Gee, my chest hurts, I think I’ll just tough it out, I wouldn’t want everyone’s premiums to increase. We are talking about people here, not widgets, did you pause to think what your last statement might come across like?

              • Submitted by John Appelen on 10/28/2014 - 03:31 pm.

                Best For You

                So when you buy insurance that you need to pay for, do you opt for the 0 deductible, 0 copay, unlimited benefit, ultra high premium policy?

                Are you carrying like $100,000,000 in life insurance and paying big premiums?
                Do you have $0 deductibles on your car / home insurance, no matter the premium?
                If your company offers health insurance options, do you buy the one with highest premium?

                Are people here advocating a single payer health care system where there are no limits?
                Now who again is going to pay those high premiums?

                • Submitted by Matt Haas on 10/28/2014 - 07:36 pm.

                  I hate to break it to you

                  But Joe Schmoe going to the clinic to get his sniffles looked at is not what breaks the system. You on the right have a quandary, you know what it is you WANT to do, deny care to those who can’t pay, since its really the only way to make your farcical plans for healthcare actually work. Trouble is, you haven’t figured out how to do it without being called, rightly, inhuman monsters. Look, the only way to make this work is to treat healthcare as what it is, a necessity for a stable functioning society. We expect the government to guarantee things like a stable food supply, clean water, and sanitation. Healthcare is no different, the sooner we realize it, the better off we’ll be.

                  • Submitted by John Appelen on 10/29/2014 - 08:17 am.

                    Entitled

                    We already have medicare, food stamps, social security, housing assistance, heating assistance, emergency room treatment, SS disability and dozens of more programs to help the truly needy.

                    It seems that you are advocating that people are entitled to food and healthcare just because they live in America. Whether they choose to be productive members of our society or not. And that the productive members of our society are obligated to pay for it.

                    Is this a correct summary?

                    By the way, ACA already does this. Not sure why people want single payer. Did you read the piece from the Canadian author?

                    • Submitted by Matt Haas on 10/29/2014 - 09:50 am.

                      Backwards

                      We don’t provide these items because people “deserve” them, that’s your hang up. We provide them because its a benefit to society when its members are not hungry or sick, or bankrupt from attempting to satisfy those necessities. Interjecting your personal sense of morality as a precondition for aid is nothing but an attempt at social engineering. As for ACA vs single payer, last I checked its not my side screaming bloody murder about repealing it.

                    • Submitted by John Appelen on 10/29/2014 - 12:53 pm.

                      Benefit to Society

                      “benefit to society when its members are not hungry or sick, or bankrupt”

                      How again is preventing people from experiencing the natural consequences of the choices they make a benefit to society? Especially when the cushions provided for them are at the expense of those who are making good responsible decisions? Here are some examples:

                      – Subsidizing insurance or making disaster payouts who build in a flood plain…
                      – Providing food, healthcare, etc to those who squandered the $180,000+ per person public education investment that was provided to them by society. (ie poor academic capabilities)
                      – Providing childcare subsidies when people are irresponsible and have children they can not afford to care for.
                      – Providing heating assistance to those who choose to live in a home that is much bigger and inefficient than they can afford.

                      I do agree that we need to help them, however I don’t think we need to eliminate all the negative consequences of their bad choices.

                      The folks here don’t seem satisfied with ACA, they are saying that we need single payer.

                    • Submitted by jason myron on 10/29/2014 - 01:59 pm.

                      Here we go…

                      Appelen’s usual “bad choices” meme again. As Yogi Berra once said..”it’s deja vu all over again.”
                      None of us are satisfied with the ACA and if you drill deeper into the GOP pointing towards polling that suggest unhappiness with it, you’ll find a good many respondents are unhappy because it doesn’t go far enough. Obama capitulated to the GOP, thinking that using their own idea would garner support from them, when he should have held firm and went for single payer. He completely misread the depths of their hypocrisy and hatred for him. The ACA is a start and will eventually open the door for single payer in this country, sooner rather than later.

                    • Submitted by John Appelen on 10/29/2014 - 03:37 pm.

                      Choices

                      So do you think the above are good choices that we should support and encourage?

                      Building in flood plain, not learning while in K-12 school, having children you can not afford to care for, having people stay in a larger and more inefficient home than they can afford, etc.

                • Submitted by jason myron on 10/29/2014 - 01:40 pm.

                  You bet we are.

                  and it can easily be paid for with a fraction of the bloated defense budget. We’re dumping over 400 billion on the F35 program that has produced a nearly un-flyable aircraft that trails in nearly every aerodynamic capability of the enemy aircraft it’s supposed to be superior to. Extrapolate the cost of maintenance over the next 50 years and we’re in the trillion dollar range. Yes…I’d rather see that money go towards the health and well being of our fellow citizens.

                  • Submitted by John Appelen on 10/29/2014 - 02:57 pm.

                    You do

                    “So when you buy insurance that you need to pay for, do you opt for the 0 deductible, 0 copay, unlimited benefit, ultra high premium policy?”

                    I kind of doubt it. You would be the only person I know who does. Typically people:
                    – Carry maybe 10X their yearly salary in life insurance.
                    – Opt for the middle of the road health insurance choice that has lower premiums and higher co-pays/deductibles.
                    – Maybe carry 250,500,250 max in liability insurance on their cars.

                    Yet when it comes to insurance that someone else will be paying for, you want to choose differently.

                    • Submitted by jason myron on 10/29/2014 - 06:33 pm.

                      I have a very nice health plan

                      that accommodates the needs of my family quite nicely, thank you. I also have standard deductibles and liability coverages on my vehicles, home and cabin. You life insurance number illustrates how far outside the reality of middle class Americans your thought process truly is. It might be accurate for those of us that can afford it, but not for a good chunk of Americans unless they can get a deal through their employer.

              • Submitted by John Appelen on 10/28/2014 - 03:42 pm.

                Interesting Story

                Please read to understand the complexity of single payer.
                http://www.city-journal.org/html/17_3_canadian_healthcare.html

                • Submitted by jason myron on 10/29/2014 - 01:29 pm.

                  What’s interesting about it?

                  It’s a seven year old piece by the GOP’s go to guy and carries as much weight or validity as an opinion on gun control by Wayne LaPierre.

        • Submitted by Jonathan Ecklund on 10/27/2014 - 11:10 am.

          In a word…

          Yes.

  9. Submitted by Jon Lord on 10/28/2014 - 10:11 am.

    Hey

    Now that Ebola is here, this must be a great time to limit health insurance. Because as we know we can quarantine people coming in from west Africa! Surely they wouldn’t travel to another country first and if they do obviously their health insurance policies would…uh…depending on that particular country…uh…who’s side is Ebola on anyway?

  10. Submitted by Jim Boulay on 10/31/2014 - 09:42 am.

    Women in America vs the world

    It’s interesting that Applelen feels compassion for women in Afganistan vs here in the United States and that our country’s treasure is better spent on a war halfway around the world than providing clinic visits to poor women in our state. Is there an underlying racism here that says our own neighbors aren’t worthy? Let me guess who these “takers” are and where they live! People in Minnesota want solutions for our WHOLE community. I benefit in many ways if my neighbor is healthy and seeing his doctor regularly. Who’s going to shovel my driveway when I’m away?!

    Don’t you know that if you allow patients clinic visits, their trips to the emergency room and hospitalizations drop dramatically and their overall healthcare is CHEAPER?!

    • Submitted by John Appelen on 11/02/2014 - 09:59 pm.

      Either or

      I believe that I noted that I was fine with spending some money both here and there to help women and children. Where as many here seem to support spending none there and more here.

      As for the source I linked to above, they do say that that the Conservative’s cost estimate of $1 trillion was too high. However they did note that the real number is somewhere between $300 billion and $1 trillion per year depending on what is included. Now that is some serious cash redistribution.

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