Minnesota Obamacare exchange 'near collapse'

The Minnesota state insurance commissioner says the state's Obamacare insurance exchange is "near collapse" and to save it, insurers must raise their rates on average by 60% and allow the companies to limit enrollment.


“It’s in an emergency situation -- we worked hard and avoided a collapse.” Rothman said in a telephone interview. “It’s a stopgap for 2017.”

On average, rates in the state will rise by about 60 percent, said Shane Delaney, a spokesman for MNSure, the state’s marketplace for Obamacare plans. About 250,000 people, or 5 percent of the state’s population, were covered under plans bought on the individual market, including plans bought on the Affordable Care Act markets as well as outside it.

Many people in the exchanges are eligible for tax credits to help reduce the cost of the premiums, Rothman’s office said, though those subsidies cut off once a family of four has an income of $97,200 or more. The law requires all Americans to buy insurance or pay a penalty. In Minnesota, a low-cost plan for a single person last year had annual premiums of about $2,800, before any tax credits, according to the Kaiser Family Foundation.

Most of the insurers in Minnesota’s individual market also plan to limit enrollment, to avoid taking on too many customers from Blue Cross and Blue Shield of Minnesota, which is leaving the exchanges after financial losses, the state said. Taking on too many new customers could harm insurers’ finances or overwhelm the doctors and hospitals that they contract with.

Jonathan Gold, a spokesman for the U.S. Department of Health and Human Services, said Minnesotans would still have affordable options for coverage next year. “Headline rate changes do not reflect what these consumers actually pay because tax credits reduce the cost of coverage below the sticker price,” Gold said in a statement.

Of the about 70,000 people who had insurance on the Obamacare markets this year, 63 percent got subsidies last year, according to the commissioner’s office.

Mr. Gold is delusional. Thousands of families in Minnesota will bear the full brunt of premium increases. Even those who receive subsidies will pay more for their insurance this year. The idea of "affordable" health insurance in Minnesota is a cruel joke.

The recent exit of Blue Cross Blue Shield from the exchange has reduced consumer options to the bare minimum. This is something we are going to see in other states with federal exchanges as companies can no longer bear the hundreds of millions of dollars in losses they are experiencing and pull out of the program.

What effect, if any, will this have on the presidential race in Minnesota? Consumers are going to see and feel those price increases immediately. I suspect that Obamacare may not have quite the impact as a political issue that it had in 2010 and 2012, but the increases will remind Minnesotans which party forced Obamacare down their throats and which party wants to get rid of it.