Minnesota’s biggest health plans in the market where individuals buy coverage are seeking premium increases for next year — though less dramatic than what they sought for 2022.
The Minnesota Department of Commerce released the rate proposals on Friday.
Three large carriers in the market are seeking 2023 average increases of between 2% and 6%. A fourth large insurer has proposed lowering premiums by an average of 2%.
“I would consider those increases to be moderate,” said Cynthia Cox, a researcher with the California-based Kaiser Family Foundation who follows the individual market.
The rate increases are somewhat more palatable than the roughly 10% jumps sought by some carriers a year ago.
Cox added that premium trends can vary significantly from across states.
“Nationally, I’m expecting premiums to increase more than in recent years,” she said in an email. “Insurers aren’t as profitable as they had been in the last few years and we might start seeing inflation in the rest of the economy flow through to the health sector.”
In Minnesota, consumers can file public comments on the rate proposals until July 18. Final numbers will be released on or before Oct. 1.
Minnesotans under the age of 65 who are self-employed or don’t get coverage from their employer are the primary purchasers of individual health insurance policies.
The market has been in the spotlight since 2014 when the federal Affordable Care Act brought large subsidies for many buyers of the coverage, so long as they purchase through a government-run exchange like Minnesota’s MNsure.
For 2023, carriers are seeking the following average rate changes: UCare +6.2%; Medica +6%; HealthPartners +2.1%; and the HMO at Blue Cross and Blue Shield of Minnesota -2.3%.
Last summer, Commerce’s review process for 2022 rates resulted in three of the largest carriers in the market lowering average premium increases by one or two percentage points. For the fourth large carrier in the market, the final approved rates were about four percentage points higher than initially proposed.
“The Commerce Department does not ‘set’ health insurance rates,” the agency said in background materials about the 2023 proposals.
“Instead, it reviews the information submitted by the insurers to determine whether their proposed rates are justified. Rates must be justified both by the benefits that consumers receive for their premiums and by the insurance company’s ability to pay expected medical claims costs based on premium revenue.”
Commerce says the rate review process ensures that carriers provide coverage of pre-existing conditions as well as no-cost preventive care. The state also checks to make sure health plans have an adequate network of health care providers.
The proposed rates are averages. Individual market rates can vary based on an individual’s age, tobacco use, family size and geography. In addition, Commerce says the rate changes can vary based on the specific plan a consumer purchases as well as the renewal date.
Last year, more than 159,000 people were buying individual market coverage, Commerce said in a report this month. The biggest carriers in the market at the time were UCare (49,649), HealthPartners (47,648), the HMO at Blue Cross and Blue Shield of Minnesota (32,759) and Medica (25,185).
PreferredOne and Quartz Health Plan, each of which covered fewer than 4,000 people in the market during 2021, are asking for average rate increases of 18% and 22.2% respectively.
As of May, 113,460 people were buying individual insurance policies via MNsure, the health exchange reported this month. At the time, about 45% of enrollees were in a health plan from UCare.
Christopher Snowbeck covers health insurers, including Minnetonka-based UnitedHealth Group, and the business of running hospitals and clinics.
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