With 'Reinsurance,' Minnesotans Who Buy Own Health Coverage Could See Rate Decreases

July 31, 2017 06:18 PM

Some Minnesotans who buy health insurance on their own could see only slight rate increases, or even possible rate reductions next year.

That is if the federal government approves and helps fund a new, $542 million fund approved by state lawmakers to help insurers control rising costs.


RELATED: Minnesota Residents to Get First Glimpse at Insurance Rates Monday

That's according to the proposed 2018 health insurance rates submitted by insurers to the Minnesota Commerce Department and released Monday.

Final rates are expected by Oct. 2. The preliminary rate proposals must be reviewed by the Commerce Department.

The 2018 open enrollment period to purchase health insurance opens Nov. 1 and is scheduled to continue through Dec. 15.

A Department of Commerce release said around 166,000 Minnesotans have health coverage through the individual market.

With "reinsurance," Blue Plus proposed an average rate change of between a decrease of 1.5 percent to an increase of 11.4 percent. Group Health proposed an average rate decrease of between 14.5 and 13.4 percent. Medica Insurance Company proposed an average rate change of between a 5.3 percent decrease and a 5.3 percent increase.

UCare is proposing a rate decrease of 14.5 percent.

However, without 'reinsurance,' Blue Plus is proposing an average rate increase of between 16.4 percent to 31.7 percent. Group Health is proposing an average rate increase of between 3.3 and 4.6 percent. Medica Insurance company is proposing an average rate increase of between 15.4 to 29.4 percent.

UCare is proposing a rate increase of 9.4 percent.

The actual rate change one could experience can vary depending on the plan, age and other factors.

Gov. Mark Dayton's administration hopes to secure federal approval for 'reinsurance' soon.

But it was welcome news for shoppers and politicians after insurers bumped their prices by as much as 67 percent this year. 

Dayton called it "tremendous news" that health insurance rates will remain basically unchanged.

The governor's full statement is as follows:

"Minnesotans, who buy their health insurance on the Individual Market, are receiving the tremendous news that proposed insurance rates will remain essentially unchanged next year. That assumes the federal government will approve our state's new Reinsurance Law, as we have requested. I applaud the Minnesota legislators, who worked together to pass this pioneering legislation, which is being shown to cause major reductions in the costs of health insurance next year for many thousands of Minnesotans.

"However, those reductions come at a very high cost to our state's treasury, totaling $543 million over the next two years. We will be hard-pressed to continue to provide those subsidies alone. It is essential that the President and the US Congress act now to share this responsibility in the years ahead."

Ezra Golberstein, an associated professor of health policy and management at the University of Minnesota, said the projected numbers are welcome news for consumers. 

"For the most part they aren't changing that much -- some of the plans actually we're seeing really significant reductions in premiums," Golberstein said.

"Obviously we like to see healthcare spending slow down as much as possible and get more value out of it and hopefully this is a sign that the markets are really starting to stabilize."

The Associated Press contributed to this report.


Frank Rajkowski

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