Rochester is the medical Mecca of Minnesota, home to the world-famous Mayo Clinic and a very health-conscious local population.
So why does it have the most expensive health-care plans in the state on the new MNsure health care exchange unveiled last week, as well as the fewest plan options available?
That's one glitch in the brand-new system that state officials and local political leaders are trying to figure out. That comes even as the Oct. 1 start of enrollment — and the Jan. 1 deadline for getting health insurance under the Affordable Care Act — are approaching rapidly.
John Schreiber, of West Concord, was shocked at the disparity when he went shopping for a plan on MNsure. Within the region, his home county of Dodge, as well as Olmsted, had particularly high rates, and few plan options.
"An online marketplace is a good idea, but I can see something is wrong here, if I'm paying $600 for insurance, and my neighbor a few miles to the northwest is paying 40 percent less for the same doctor," said Schreiber, a teacher at Triton High School.
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Schreiber, 58, is not exaggerating. A 60-year-old on a silver plan making more than $45,960 per year would pay an estimated $644 per month in southeastern Minnesota, compared to just $327 in the Twin Cities area, according to the estimated prices listed on MNsure's website.
The ACA, which will mandate that all Americans get health insurance, requires that all states provide insurance exchanges such as MNsure toprovide an "apples-to-apples" comparisons of health plans from multiple insurers and an easy way to enroll. Low-income people who sign up receive assistance when enrolling to cut the cost.
Among Minnesota's eight regions, the 11-county southeastern Minnesota region has the highest rates for all age categories, for families and for small businesses, the site shows.
Why? No one's entirely sure.
"Historically, there have always been geographical differences between the various areas of the state," said Jenni Bowring-McDonough, a spokeswoman for MNsure. "MNsure has made the differences in health insurance rates across the state very transparent."
One obvious factor is the Mayo Clinic, which provides health-insurance to many of its 34,000 employees in Rochester and their families.
It's so dominant that there's not a lot of competition in this region, noted Sen. Carla Nelson, R-Rochester."That's one of the problems with Minnesota in general — we don't have a great amount of choice in health plans." she said.
In addition, Mayo care, while excellent, is relatively expensive, said Rep. Tina Liebling, DFL-Rochester, who is chairwoman of the Legislature's health policy committee.
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In fact, Liebling was to meet with a Mayo official this week to talk about its cost structure. "I think Mayo is going to have to take a hard look at that problem," Liebling said.
Asked about its effect on the exchange, Mayo Clinic spokesman Bryan Anderson said the clinic objects to the fee-for-service reimbursement model on which the exchange is based, as it pays for volume rather than value
"The Mayo Clinic Fee Committee regularly reviews pricing, and we are confident our pricing structure, as illustrated by multiple sources, including the Dartmouth Atlas, creates value for patients," Anderson said.
The total cost of treatment of a disease may be a more reliable measure of value than the cost of each component part, Anderson said.
"Mayo Clinic remains committed to working with payers both public and commercial to develop a payment mechanism that best reflects costs over an illness, rewards speed to accurate diagnosis and delivers care that is integrated and always focused on the needs of the patient," he said.
Schreiber has been perusing the exchange because he's on the negotiations committee at Triton High School, which also is negotiating for employee health insurance. In the past, the school has paid employees a set amount and they've bought their own individual insurance, but under the Affordable Care Act the school likely will offer a group insurance policy. In addition, Schreiber's wife, who works for a small church, likely will buy individual insurance under the MNsure exchange.
"As soon as it went online, I looked at the MNsure plan, and I was shocked that southeastern Minnesota is definitely the pariah of the state," Schreiber said.
Schreiber has asked legislators and MNsure officials and others why that is. "Nobody is giving me a good answer," he said.
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Schreiber says that although the school likely will offer a group plan, his understanding is individuals can opt out and take cash in lieu if they are covered under a spouse's plan.
"No matter what, it would be cheaper for us to move to a different county," Schreiber said, adding that there's also the threat that the high rates in southeastern Minnesota would drive businesses away elsewhere.
"Something had to be done with health insurance, because it was so broken," Schreiber said. "As always, the devil's in the details."
Cutting the state into regions with vast price differences seems unfair, he said. "To me, that's not all for one and one for all," he said.
