By Katherine Doherty and Zachary Tracer
Obamacare rates to rise 50 percent to 67 percent in state
Minnesota will let the health insurers in its Obamacare market raise rates by at least 50 percent next year, after the individual market there came to the brink of collapse, the state’s commerce commissioner said Friday.
The increases range from 50 percent to 67 percent, Commissioner Mike Rothman’s office said in a statement. Rothman, who regulates the state’s insurers, is an appointee under Governor Mark Dayton, a Democrat. The rate hike follows increases for this year of 14 percent to 49 percent.
“It’s in an emergency situation — we worked hard and avoided a collapse.” Rothman said in a telephone interview. “It’s a stopgap for 2017.”
On average, rates in the state will rise by about 60 percent, said Shane Delaney, a spokesman for MNSure, the state’s marketplace for Obamacare plans. About 250,000 people, or 5 percent of the state’s population, were covered under plans bought on the individual market, including plans bought on the Affordable Care Act markets as well as outside it.
Many people in the exchanges are eligible for tax credits to help reduce the cost of the premiums, Rothman’s office said, though those subsidies cut off once a family of four has an income of $97,200 or more. The law requires all Americans to buy insurance or pay a penalty. In Minnesota, a low-cost plan for a single person last year had annual premiums of about $2,800, before any tax credits, according to the Kaiser Family Foundation.
Most of the insurers in Minnesota’s individual market also plan to limit enrollment, to avoid taking on too many customers from Blue Cross and Blue Shield of Minnesota, which is leaving the exchanges after financial losses, the state said. Taking on too many new customers could harm insurers’ finances or overwhelm the doctors and hospitals that they contract with.
Jonathan Gold, a spokesman for the U.S. Department of Health and Human Services, said Minnesotans would still have affordable options for coverage next year. “Headline rate changes do not reflect what these consumers actually pay because tax credits reduce the cost of coverage below the sticker price,” Gold said in a statement.
Of the about 70,000 people who had insurance on the Obamacare markets this year, 63 percent got subsidies last year, according to the commissioner’s office.
Minnesota State House Speaker Kurt Daudt, a Republican, said the rate increases, along with allowing some insurers to limit enrollment, were creating a crisis.
“The unhealthy combination of massive cost increases and enrollment caps is creating a health care crisis for thousands of Minnesota families,” Daudt said in a statement.
Commissioner Rothman called for changes to the individual marketplace.
“Last year at this time when rates were announced, I said there was a serious need for reform in Minnesota’s individual market,” he said. “This year the need for reform is now without any doubt even more serious and urgent.” He called the rising rates “unsustainable and unfair” and said that people were being “crushed by the heavy burden of these costs.”
Obamacare Troubles Trigger An HMO Comeback
By Bruce Japsen
The once hated health maintenance organization (HMO) is having a comeback under the Affordable Care Act as insurers look to control the medical expenses of Obamacare patients.
HMOs, with their restrictive features that generally limit the choices of doctors and hospitals to their provider networks, gave rise to the patients’ rights movement of the 1990s. That anti-HMO movement led to laws that required plans cover longer hospital stays for baby deliveries and allow better access to specialists.
But with health plans dogged by sicker-than-expected patients, insurers are returning to HMOs in hopes of offering a more affordable product that keeps medical expenses in check. And some are ditching preferred provider organization (PPO) options because it’s more difficult to control costs once patients go outside of networks.
“The reason that HMOs are so broadly used is because plans can limit the provider network in order to reduce premiums ,” said Caroline Pearson, senior vice president of Avalere Health, which is tracking the rollout of the ACA. “Low premium plans have drawn the highest enrollment on exchanges, so that is where insurers have focused their effort.”
Just last week, Iowa’s largest health insurance company, Wellmark Blue Cross and Blue Shield announced a new HMO plan called Blue Simplicity that is “ACA-compliant” and available in Iowa off exchange as part of its offerings. “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,” said Wellmark CEO John Forsyth. “While we could seek additional premium increases to mitigate rising costs, this is not sustainable for our members’ pocketbook.”
Humana said it will “focus primarily on metro areas conducive to HMO arrangements,”spokesman Mark Mathis said, referring to individual coverage the insurer will offer via public exchanges in 11 states next year. “These are places where we can offer a high quality product that we believe will appeal to individuals buying individual medical coverage through the public exchange.”
The shift to more HMOs for Obamacare patients continues a trend that escalated when the availability of PPOs this year dropped to “28 percent of plan offerings from 35% in 2015,” Avalere’s Pearson said. HMOs comprise 49% of ACA plans and are the “predominant design in exchanges,” she said.
The Blue Cross and Blue Shield Association, too, said earlier this year 52% of the insurance products offered on public exchanges are health maintenance organizations (HMOs) or plans that limit healthcare providers “within a predetermined network,” in a study that analyzed data from major insurers including Blues plans, Aetna, UnitedHealth Group, Anthem and Humana. “The share of HMO and (exclusive provider organization) products offered in the marketplaces is increasing,” Maureen Sullivan, the Blue Cross association’s chief strategy officer said earlier this month.
The move to HMOs, however, isn’t taking off for Americans who still get their coverage through their employer, benefits consultants say.
“In general, employers have moved away from HMOs over the last decade and have been slow to embrace similar types of models, primarily due to the lack of consistency in network composition and proven results across local markets,” said Craig Dolezal, senior vice president of the health practice at AON. “However, as employers look to better manage health care spend and help employees navigate the health care system, we are seeing a resurgence of interest in more narrow, high performing networks and ACOs in certain key markets.”
Ailing Obama Health Care Act May Have to Change to Survive
WASHINGTON — The fierce struggle to enact and carry out the Affordable Care Act was supposed to put an end to 75 years of fighting for a health care system to insure all Americans. Instead, the law’s troubles could make it just a way station on the road to another, more stable health care system, the shape of which could be determined on Election Day.
The departing president, the woman who seeks to replace him and nearly one-third of the Senate have endorsed a new government-sponsored health plan, the so-called public option, to give consumers an additional choice. A significant number of Democrats, for whom Senator Bernie Sanders spoke in the primaries, favor a single-payer arrangement, which could take the form of Medicare for all.
Tags: Aetna, Affordable Care Act, Anthem, Blue Cross and Blue Shield, health care, health insurers, health maintenance organization, healthcare, healthcare providers, HMOs, Humana, insurance, Kaiser Family Foundation, Mark Dayton, Mike Rothman, Minnesota, obamacare, PPO, preferred provider organization, single-payer, tax credits, UnitedHealth