Legislators look into region's high MNsure costs
Several area legislators have heard complaints about the high prices of MNsure health care plans in southeastern Minnesota — more than any other region in the state — and are looking into it.
The key, said Rep. Tina Liebling, DFL-Rochester, is to understand that the health care exchange is a work in progress, and needed changes can be made.
"When people see this — there may be new entrants into the market," Liebling said. "There may be a lot of innovation going on for a few years in the insurance market. If there's a void, people rush in to fill it."
Companies put in their bids for health care plans region-by-region, based on provider costs and availability in each region, Liebling noted.
"The companies put together plans and pricing without knowing what any other company was going to be putting forward," Liebling said. "Everybody's giving their lowest price. That's why you see an overall big drop in prices. Why then, is our area is so expensive?"
State officials also are quick to point out that the MNsure rates are not set by the government — they're set by a private bidding process.
Part of the problem may be less competition here, several observers noted. Just two providers offer plans in southeastern Minnesota: Blue Cross & Blue Shield of Minnesota, and Medica of Wisconsin. All other sections of the state have three to five providers offering plans.
"Why would insurance companies not choose to have a plan in Olmsted County, one of the healthiest counties in the state, and a vanguard of health?" asked Sen. Carla Nelson, R-Rochester. "I'm just not sure."
It may be because the largest employer — Mayo Clinic — self-insures, she said.
Subsidies help many
State are officials are quick to note that while unsubsidized rates are much higher in this region, many people qualify for subsidies, and the subsidized rates are close to those in other regions.
Subsidies are available for people with annual incomes of $23,000 to about $46,000. For a family of four, the income range is $47,100 to $94,200. Government health plans are available for people making less.
Also, MNsure officials point out that statewide, Minnesota has the lowest average rates in the country compared to plans offered on 11 other exchanges. And so the rates offered in southeastern Minnesota may be high compared to the rest of the state, they still may be better than what people had before, Liebling said.
"For many people, this will be a better deal, even though it's higher than in other part of the state," Liebling noted.
It's also a new process, points out Anne O'Connor, communications director for the Department of Commerce. With MNSure, rates for the first time are determined based only on geography, age and whether you use tobacco, making it hard to compare with past rates.
Nelson is very concerned about the prices.
"A 25-year-old single nonsmoking male in Olmsted County pays $180 a month. The same single nonsmoking male in the metro area pays half of that — $90," Nelson said. "I'm scratching my head."
One of state's healthiest counties
Olmsted is one of the healthiest counties in the state, and insurance premiums are based upon risk.
"I'm not sure that a 25-year-old nonsmoking male is twice as costly in Olmsted County," Nelson said.
Liebling thinks one reason for the high rates may be that Rochester's main provider — Mayo Clinic — is more expensive than other providers, although it's very high quality care.
"In this part of the state, every network is going to have Mayo in them; It's going to be where most of people here get their care, at least their higher level care," she said.
But Mayo Clinic sees the pricing structure of MNsure as more of the problem. Instead of the traditional fee-for-service reimbursement model, Mayo prefers a model that focuses on the value of care, said Mayo spokesmanBryan Anderson of Mayo Clinic
"We are also confident of our value for patients and value for payers of integrated care delivered in a coordinated fashion," Anderson said. "However, the fee for service reimbursement model is not designed to reimburse for value but rather for volume. This is precisely why we are investing significant resources in research and innovation on how costs should be determined in health care."
Mayo believes the pricing should look at the total cost of treatment for a disease, rewarding efficiency, quality and patient satisfaction.
Olmsted County has one of the lowest rates of uninsured people in the state, and many residents are covered by Mayo Clinic insurance. So relatively few people are affected by MNsure plans, Liebling said.
"For people who are uninsured, and people who are buying in the private market already, and for small employers, many of whom aren't able to offer anything, we'll have to see how it shakes out," Liebling said.
Market may innovate
Policy makers want people to tell them how the MNsure system works, so they can make needed changes, Liebling said.
This is only the first round of offerings, and next year the MNsure board will be able to change the criteria for people who are able to sell on the exchange, she said.
For instance, there isn't a platinum plan in this area, Liebling said. "Hopefully, when companies see what's offered they'll fill those gaps," Liebling said.
The whole point of the ACA was to make the insurance market into a market.
"That doesn't mean we've completely fixed and reformed our whole health care system," Liebling said. "This is nobody's idea of a perfect plan because there's lots of compromise, and there are lots of bugs to be worked out. Hopefully we'll be able to make those changes going forward, as we find them."
MNsure's step-by-step process for buying insurance through its exchange
1. Access the website. Choose either the individual or small employer category.
2. Input details about yourself. You'll see a range of plans that match what you are seeking. All the plans will meet standard requirements for value and quality.
3. Select a plan. Compare your options by price, provider or services offered.
4. Reduce your cost. You may qualify for tax credits or health programs.
5. Complete your enrollment. Individuals and families only need to fill out one application for any type of health coverage offered through the MNsure marketplace.
Oct. 1:Open enrollment in MNsure begins.
Jan. 1:all U.S. citizens and legal residents will be required to have health insurance coverage. Those who don't face a penalty.
March 31:Open enrollment in MNsure ends.