MNsure premiums drop with reinsurance

A new report finds that health insurance premiums available on the state's MNsure exchange in 2018 are significantly lower than last year due in large part to a state government program.

The average monthly premium for a 40-year-old nonsmoker buying the lowest priced "silver" health plan in Minnesota is $365, a decline of 15 percent compared with last year, according to a report Wednesday from researchers at the Urban Institute.

The average for comparable consumers across the country is moving the other way -- growing by nearly one-third this year to $444.

"Last year, [Minnesota] premiums were significantly above the national average," said Erik Wengle, one of the Urban Institute researchers, in an interview. "With the addition of reinsurance payments, that has come down to significantly below the national average."

The numbers apply only to the individual health insurance market, which primarily serves people under age 65 who are self employed or work for companies that don't provide health plans. The individual market has undergone sweeping change as part of the federal Affordable Care Act (ACA), which launched government-run health insurance exchanges including MNsure.

Created by legislation passed in 2017, Minnesota's reinsurance program is covering a large chunk of insurance company costs for individual market enrollees with unusually large medical bills. The state Legislature is funding the program this year with $271 million.

Minnesota launched the reinsurance effort after the individual health insurance market nearly collapsed in 2016 following an announcement that Eagan-based Blue Cross and Blue Shield was pulling its most popular plans for individuals. The state also shored up the market in 2017 with one-time rebates for consumers.

The rebates, in fact, mean that individual consumers might not recognize that premiums are lower in 2018, because they weren't paying the sticker price for coverage last year last year.

Nationally, premiums for individual market coverage on the exchanges are up due in part to the federal government's decision to halt reimbursements to insurers for consumer subsidies known as "cost sharing reductions," or CSRs for short.

Relatively few MNsure shoppers qualify for CSRs, however, so the change hasn't had much impact on prices in Minnesota, Wengle said.

In 2018, the state average lowest silver premiums for a 40-year-old nonsmoker are ranging from $287 per month (up 18.3 percent) in Rhode Island to $860 per month (up 74 percent) in Wyoming .