Health plan limits could pinch Minnesota insurance shoppers

It's easy to understand the consumer outrage prompted by last month's announcement of 50 percent premium increases in the state's individual market.

What's come into view since then are more complicated challenges from enrollment caps and network limits in the market where about 250,000 state residents buy policies.

The state Commerce Department is letting most insurers cap their enrollment for 2017 so the carriers aren't overwhelmed. As a result, consumers who don't shop quickly might not have a chance at the health insurance policy they would prefer.

In addition, all plans in the market this year feature limits on networks, so patients might not find a plan with low-cost access to the doctors and hospitals they want.

The Mayo Clinic is a case in point, since health plans outside southern Minnesota won't include the famed Rochester-based clinic as an in-network provider.

The caps make Minnesota unique, but what's happening with tight networks reflects a trend in the individual market, which includes new government-run health exchanges like Minnesota's MNsure.

"Generally speaking, I think most people on the exchanges continue to be satisfied with their provider networks," said Cynthia Cox, a researcher with the Kaiser Family Foundation. "At the same time, most people don't necessarily need to see a particular specialist. ... At any given time there are only so many people who are going to be sick enough where the narrowness of the network may negatively affect them."

The caps and network limits come in the state's individual health insurance market, where about 5 percent of state residents buy coverage. It's a market that serves self-employed people, and those who don't get health insurance from their employer.

The limits do not apply to people in employer health plans, or people in government programs including Medicare, Medicaid and MinnesotaCare.

The individual market is undergoing fundamental changes with the federal Affordable Care Act. It eliminated health plan exclusions for people with preexisting medical conditions, a key cost-saving tactic for insurers.

Insurers have struggled to make the business profitable, with Minnetonka-based UnitedHealthcare put a spotlight on the problems nearly a year ago. As the nation's largest health insurer, United has since said it will stop selling coverage next year on exchanges for 30 states where the carrier currently competes.

UnitedHealthcare does not sell coverage in Minnesota, but carriers here have lost money, too.In June, Eagan-based Blue Cross and Blue Shield of Minnesota said it would pull policies that currently cover about 103,000 state residents.

Blue Cross will still compete in the market with coverage through its Blue Plus HMO, but the carrier's pullback nearly triggered a market collapse as regulators scrambled to keep other insurers from jumping ship.

Regulators said that's why they approved rate increases of 50 percent to 67 percent and enrollment caps.

The caps and network changes will complicate the coming health plan shopping season, said Heidi Mathson, a past president of the Minnesota Association of Health Underwriters, a trade group for insurance agents.

A year-ago, as consumers were sizing up premium jumps for 2016, some shoppers took a long time to decide about what choice to make to mitigate the impact, Mathson said. With the caps, consumers won't have time to wait.

"If you wait until the end of January to make a decision, there could be very little choice left for you," Mathson said. "If you even wait until December there could be fewer choices."

Blue Plus doesn't have a cap, so its plans will serve as a sort of default option in most counties. But during a legislative hearing last week, lawmakers pointed out that the Blue Plus networks don't include all hospitals and clinics.

In southeast Minnesota, Blue Plus provides access to Mayo Clinic, but not Olmsted Medical Center in Rochester on an in-network basis. In northeast Minnesota, Blue Plus includes St. Luke's Hospital in Duluth as an in-network hospital, but not the larger Essentia Health system.

The Blue Cross pullback means there will be no individual insurance policies offered outside of southern Minnesota for 2017 that will provide in-network access to Mayo Clinic in Rochester, according to clinic officials.

In a statement, Mayo Clinic spokesman Karl Oestreich said: "This is one more example of the challenges facing the individual market and regrettably patients in Minnesota. While we understand Blue Cross' decision to withdraw from this market, this decision will leave a gap in patient access to Mayo Clinic, which concerns us."

Patients can still get care at out-of-network clinics and hospitals with some level of coverage, but they will pay much more out-of-pocket, Mathson said. In particular, whereas health plans put a cap on annual costs for in-network care, there's typically no such cap when patients go out-of-network. So the costs can be prohibitive.

It can all amount to frustration, Mathson said, when network rules point patients away from the doctor or hospital they want.

"There are a lot of people who have developed a relationship with a physician, and they don't want to change physicians just because of health insurance," said Mathson, an insurance agent for more than 20 years who nonetheless has left the business, due in part to all the changes with health insurance.

All the networks were reviewed by regulators and meet adequacy standards. Health plans can make exceptions that give consumers better coverage at out-of-network hospitals in certain cases, said Monica Engel, the vice president of consumer markets at Blue Cross.

But those are unique situations, Engel said. In general, health insurers see tighter networks as a way to help control costs through better coordination of care.

"You can't resolve the individual market by just raising premiums," said Jim Schowalter, chief executive of the Minnesota Council of Health Plans, a trade group for health insurers. "You're also trying to look for ways to manage medical expenses. Working closely with provider networks is one way to do that."

Hospitals are watching all this with concern, said Lawrence Massa, president of the Minnesota Hospital Association.

"It really is wise for folks in that marketplace to start to do their shopping early," he said. "And consumers are going to have to be more discerning about what's actually in the plan that they're looking at — what's that network look like … [and] what are the out-of-pockets for out-of-network?"

Christopher Snowbeck • 612-673-4744

Twitter: @chrissnowbeck