Minnesota’s commerce commissioner called for reforms to strengthen the federal marketplace Friday after announcing monthly premium increases of at least 50 percent for 2017.
“While federal tax credits will help make monthly premiums more affordable for many Minnesotans, these rising insurance rates are both unsustainable and unfair,” Minnesota Commerce Commissioner Mike Rothman said in a statement. “Middle-class Minnesotans in particular are being crushed by the heavy burden of these costs. There is a clear and urgent need for reform to protect Minnesota consumers who purchase their own health insurance.”
The state improved monthly premium increases between 50 percent and 67 percent for the seven insurers offering plans on the state’s exchange, MNsure, in 2017. Approximately 250,000 in the state purchase insurance through the state’s marketplace, about 5 percent of the state’s population.
Federal tax credits should help those who are eligible afford their monthly premiums, Rothman said. He called the increases “unsustainable and unfair.”
The rate increases were necessary to prevent a “collapse,” Rothman suggested.
Just one insurer in Minnesota, BlueCross BlueShield of Minnesota, withdrew their participation from the exchanges for next year, citing financial losses. That prompted other insurers on the exchanges to consider withdrawing, but Rothman said the state’s commerce department took steps to prevent the state’s exchange from failing.
“We succeeded in saving the market for 2017, with only Blue Cross leaving. But the rates insurers are charging will increase significantly to address their expected costs and the loss of federal reinsurance support,” he said. “In addition, each insurer except for Blue Plus will limit its total 2017 enrollment to manage its financial or provider network capacity to absorb the many current Blue Cross consumers who will be shopping for new plans.”
The statement notes that the increase follows national trends of double-digit premium increases on the Affordable Care Act exchanges. The Obama administration has said that this is expected to be a one-time event, to make up for insurers under-pricing in the first years of the exchanges when they did not have enough data about their consumers.