Miguel Paz: Lower health care costs could cut insurance prices

If you live in Southeastern Minnesota and MNsure is your primary provider of health insurance, the Affordable Care Act is anything but affordable.

If you used Blue Cross/Blue Shield of Minnesota as your provider in 2015, you were told in October that premiums would increase by 45 percent to 49 percent. If you stayed with this plan in 2016, BCBS kept its promise and raised rates a whopping 47 percent on average.

Minnesota Commerce Commissioner Mike Rothman said the increase was due in part to a greater number of sicker people seeking coverage, as well as rising drug costs.

I have not seen the annual report from BCBS of Minnesota for 2015, but in 2014, its full-year revenue was $10.1 billion with a net income of $61.5 million, and it had a net operating loss of $8.2 million. So, maybe the increase in premiums was more likely due to BCBS wanting to improve its bottom line.

In addition, reports have shown health coverage for Southeast Minnesota residents are the highest in the state. Mayo Clinic's dominant presence in Southeast Minnesota gives it the ability to affect prices for insurance companies, which makes it an expensive market for any insurer.


When MNsure first started to serve the people of Southeast Minnesota, Mayo Clinic's government relations chairwoman, Kathleen Harrington, justified the higher costs by saying Mayo Clinic is not a community-based hospital, but an academic medical center that does research, education and top-of-the-pyramid medical care.

Mayo Clinic does do research, but by and large, most of those in Southeast Minnesota seeking treatment need a community-based hospital because they are not suffering from some obscure condition.

Minnesota HealthScores, an independent, nonprofit Minnesota community organization, rates health care coverage throughout Minnesota. According to its website, when looking at the overall cost of care, Mayo Clinic Health Systems consistently ranks higher than average. However, when looking at the quality of care and patient satisfaction rankings, Mayo Clinic Health Systems are just average.

Many residents and small-business owners in Southeast Minnesota are struggling due to the increased health care costs and additional taxes being paid to help fund the Destination Medical Center initiative. This is especially painful when you see that each year, Mayo Clinic's profits continue to increase as does its revenue.

Most recently, it was reported that Mayo Clinic had the strongest margins among Minnesota hospitals in 2014.

I'm not advocating for socialized health care, but I would hope that in the coming year, Mayo Clinic would consider lowering its health care costs to those residents of Southeast Minnesota in much the same way colleges offer lower tuition rates to in-state residents.

Miguel Paz, of Rochester, is a member of the Post-Bulletin's Community Editorial Advisory Board.

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