UnitedHealthcare's move to sell more coverage in Minnesota starting next year could help keep a lid on health insurance premiums in the region, at least in the near term, analysts say.
Minnetonka-based UnitedHealthcare, which is the nation's largest health insurer, said last week that it plans to start selling coverage to small-, midsize- and certain large-employer groups in Minnesota over the next year plus a new type of Medicare health plan.
Lower premiums at the outset "are a realistic expectation," said Rulon Stacey, a managing director with Navigant Consulting, who expects longer-term changes, as well.
"It's inconceivable to me that it will not have a major impact on the market here," said Stacey, who is the former chief executive at Minneapolis-based Fairview Health Services. "It's a very, very big deal."
UnitedHealthcare's parent, UnitedHealth Group, is the largest publicly traded company in Minnesota, and is on track this year to post $200 billion in annual revenue for the first time. It employs about 18,000 people in the state, but has been a relatively small player in the state's health insurance market.
UnitedHealthcare has been absent from the market where small and large employers purchase "fully insured" coverage, meaning insurance companies take the financial risk for claims. Last year, about 967,000 Minnesotans were covered through fully-insured plans for small and large groups, according to the state Commerce Department.
UnitedHealthcare also has been absent from Minnesota's market for Medicare health plans, although it sells prescription drug plans and supplemental policies in the state. In 24 states, UnitedHealthcare has the largest market share among Medicare Advantage insurers, according to a report this year from the Kaiser Family Foundation, and the company is among the top three sellers of Medicare plans in another 19 states.
For the largest employers in Minnesota, UnitedHealthcare has had a presence in the state's insurance market for many years. The insurer has worked as a third-party administrator to large "self-funded" employers, meaning groups that take the financial risk for the cost of employee medical claims.