qotd: Ask Minnesota if the individual insurance market is stable

StarTribune

September 30, 2016

Individual health plan premiums to jump at least 50 percent in Minn.

By Christopher Snowbeck

Health insurers are hiking premiums and limiting enrollment in Minnesota's individual market next year, with regulators saying the emergency measures were needed to avert a market collapse.

The moves are a clear sign that the market for some 250,000 people who buy coverage for themselves is dysfunctional and needs reform, said Commerce Commissioner Mike Rothman during a Friday news conference.

While rate increases of more than 50 percent aren't fair to consumers, Rothman said, things could have been worse. He described a period this summer when all health insurers in the state seemed prepared to abandon that segment of the market.

The premium jumps and enrollment caps are confined to the individual market, where about 5 percent of state residents buy coverage. The market includes the MNsure exchange and has undergone significant changes with the federal Affordable Care Act.

Premiums will jump by an average of 50 percent to 67 percent, depending on the insurer. Regulators also are taking the unusual step of letting most health plans limit the number of enrollees they'll cover.

The caps will pressure consumers to shop early during the coming open enrollment period, since some plan options could disappear once insurers hit their limits. And regulators say the policies being sold for next year will feature tighter controls on the doctors and hospitals that enrollees can use.

The premium hikes and enrollment caps amount to a "finger in the dike" that's meant to buy time while the state figures out what to do, said Jim Schowalter, chief executive of the Minnesota Council of Health Plans, a trade group for insurers.

"What I think no one really appreciated until today was the trouble that the insurance market is in," Schowalter said. "This announcement is another sign that how people are getting their own insurance isn't working."

"These rising insurance rates are unsustainable and unfair," Rothman said. "Middle-class Minnesotans, in particular, are being crushed by the heavy burden of shouldering these costs."

http://www.startribune.com/health-plan-premiums-to-jump-more-than-50-percent-in-minnesota/395432101/

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Comment by Don McCanne

We keep hearing that ACA is working as intended, that all we need to do is enroll more younger, healthier individuals in the plans and all will be well. Ask the people in Minnesota how it is going. And they certainly are not the only state with problems.

Our politicians on the one hand tell us that all we need is a couple of patches, and on the other hand tell us that we should dump the system and let the markets work. Well, the system is not amenable to patches - we need comprehensive reform of the financing infrastructure - and the market cannot possibly work when prices far exceed the discretionary income of most of those who need health care.

The current patches in Minnesota include large premium hikes, and allowing the insurers to put limits on the total number of enrollees. Those patches might help the insurers, but for patients they make insurance less affordable and less accessible. Wasn't reform supposed to take care of patients?

Regular readers know what would work - a well designed single payer national health program. Everyone would be covered by a system that would be affordable for each one of us. Minnesota should be leading the way on this.

qotd: Wellmark Blue Cross and Blue Shield placing greater squeeze on patients

Wellmark

September 28, 2016

Wellmark announces individual ACA market changes in Iowa and South Dakota

Wellmark Blue Cross and Blue Shield announced today it will make changes in the individual Affordable Care Act (ACA) market in Iowa and South Dakota.

For the past two years, Wellmark members with individual ACA plans have endured double-digit increases. In addition, Wellmark has lost approximately $99 million over the same time period in the individual market in Iowa and South Dakota.

"Wellmark's mission is to create affordable health insurance for people to access quality health care. And, for the majority of the past 75 years, we've been able to achieve that," said Wellmark Chairman and CEO John Forsyth. "However, it's apparent that continuing to offer plans with broad networks, combined with the rich benefits of the ACA, is not consistent with managing continually rising costs. While we could seek additional premium increases to mitigate rising costs, this is not sustainable for our members' pocketbook."

Iowa changes

In Iowa, Wellmark will narrow its product choices to offer plans that are lower priced and encourage health care delivery by Iowa providers. Specifically, Wellmark will no longer offer gold tier plans nor will the company promote individual under 65 plans that use its Preferred Provider Organization (PPO) network in Iowa.

Wellmark will also continue its plans to introduce a new, simplified HMO plan called Blue Simplicity℠. This plan is like no other on the market today and is designed to help consumers understand the true value of care through simple copay plans – providing members with transparency and predictability of cost as they seek and use medical services.

South Dakota changes

In South Dakota, Wellmark will no longer offer individual Affordable Care Act (ACA) plans effective Jan. 1, 2017.

"Although the ACA has done many positive things, it has also had its challenges and those challenges vary by state," said Forsyth. "Fortunately, in 2017, the ACA gives states the ability to begin addressing those challenges with the goal of stabilizing the individual under 65 health insurance market. We look forward to working with Iowa and South Dakota policymakers on those solutions in the near future."

https://www.wellmark.com/about/newsroom/2016/09/28/wellmark-announces-individual-aca-market-changes-in-iowa-and-south-dakota

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Comment by Don McCanne

The largest health insurer in Iowa, Wellmark Blue Cross and Blue Shield, is discontinuing their more comprehensive gold tier plans and is discontinuing the promotion of its PPO plans with wider provider networks. They are also introducing a new HMO plan "designed to help consumers understand the true value of care through simple copay plans" (i.e., making them better shoppers by having to bear more of the costs). These changes are compounding the two problems plaguing insurance purchasers today: requiring higher out-of-pocket spending for health care, and narrowing the selection of health care providers covered by the plans.

This is a one-way path designed to keep insurance premiums as competitive as possible. As Chairman and CEO Forsyth states, "continuing to offer plans with broad networks, combined with the rich benefits of the ACA, is not consistent with managing continually rising costs." Insurers are not going to cover more out-of-pocket costs by increasing the actuarial value of their plans (percent of costs they will pay), and they are not going to expand their networks when they can negotiate lower prices by promising provider exclusivity.

Look, as long as we leave these people in charge, we can anticipate that they will engage in strategies that will protect and improve their own market advantage. If we had our own public program, our stewards who work for us would be engaging in strategies that would ensure our access to the health care that we need. There really is a difference. If only for selfish reasons, we should prefer the latter. The fact that it helps everyone else is a bonus.