Our View: Tax credits will ease MNsure sticker shock
When MNsure officials announced premiums for Minnesota residents buying coverage through the health exchange would rise from 14 percent to 49 percent, the reaction from its critics was expected.
"Instead of saving families money and providing Minnesotans more access, MNsure really has cost Minnesotans more money and not really provided the access in health care that was proposed," said Republican House Speaker Kurt Daudt, who called for Republican legislators to renew an attempt to abolish MNsure and move to the federal health exchange .
Gov. Mark Dayton called that a pointless idea because the premiums would be the same whether Minnesotans buy individual coverage through MNsure or through the federal exchange. We agree with the governor and dismiss Daudt's comments as partisan hyperbole because, even if dismantling MNsure cleared the House, it would never get past the DFL-controlled Senate.
Instead, we suggest awaiting the recommendations of the 29-member MNsure task force , which was appointed during the summer. The task force, which includes Olmsted County Commissioner Sheila Kiscaden , will report to the governor and Legislature by Jan. 15.
Kiscaden explained the premium increase should be understood in context. The state was required by the Affordable Care Act, which mandated that no one could be turned down for pre-existing conditions, to end the Minnesota Comprehensive Health Association, a safety-net program for high-risk people who couldn't obtain health insurance elsewhere, and move them into the individual market.
"That individual pool now has all the high-risk people — individual purchasers that it didn't have before," said Kiscaden, who served on health-care committees throughout her 14 years as a state senator from Rochester. "The insurance companies are finding that pool of people is more expensive because they have more health issues."
Hence the dramatic rate increases, but the higher premiums will make Minnesotans eligible for more federal tax credits.
"Our premiums were so low that we weren't drawing down that federal money into our insurance market because our people at various income levels simply didn't qualify for the subsidies," Kiscaden said. "Ironically, now that our premiums are going up, those people who purchased through MNsure are the people eligible for federal tax credits, and more federal money will flow through Minnesota's marketplace."
The Kaiser Family Foundation , which studies health-care issues, ran a MNsure simulation for a 40-year-old Twin Cities man with a $30,000 income. He would have paid $235 a month in 2015, and $208 in 2016 after the subsidies.
MNsure also has run multiple scenarios finding net lower premiums for Minnesotans. For example, in 2015 a 60-year-old woman who lives in Region 1, which includes southeastern Minnesota, received a federal tax credit of $477 for a silver plan that cost $598, leaving her with $122 out-of-pocket expenses. In 2016, her premium will increase to $699 a month, but her federal subsidy will increase to $585 a month, and lower her out-of-pocket cost to just $114 a month.
Minnesotans can find out for themselves how federal tax credits apply to their situation as MNsure's next enrollment period opens Nov. 1 and ends Jan. 31.
The bottom line: If you buy your insurance through MNsure, you won't necessarily be paying sticker price.