- Larry Downing/Reuters
Another state is seeing its Affordable Care Act – better known as Obamacare – exchanges hit some serious roadblocks.
In a release on Friday, Minnesota Commerce Commissioner Mike Rothman, who oversees the exchanges on which Minnesotans not receiving insurance through their employers or government programs can get insured, said premiums will rise as much as 67% for some insurers.
According to the release, Rothman said the exchanges are “on the verge of collapse” as Blue Cross Blue Shield pulled out of the market, citing large financial losses. This exit is indicative of the mood of the other insurers, who Rothman said are “prepared to exit this market.”
Part of the problem is that the federal reinsurance program, which used to assist insurers that may have taken on sicker patients and endured losses, is expiring this year, removing a safety net for many insurers.
“The Commerce Department pursued every option within its power to avert a collapse this year,” Rothman said in the release. “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.”
According to The St. Paul Pioneer Press, Rothman described it in even more dire terms.
“These rising insurance rates are unsustainable and unfair,” Rothman told The Pioneer Press’ David Montgomery. “This is a real emergency situation.”
The issues facing Minnesota are familiar – states like Tennessee are also seeing large premium increases and a lack of competition among providers as companies exit the market. Even large, national insurers like Aetna, Humana, and United Healthcare have been rolling back their Obamacare coverage.
According to US Department of Health and Human Services spokesperson Jonathan Gold, the rise in premiums would be offset by subsidies, and many Minnesotans would not be affected.
From Gold’s statement (emphasis added):
“Headline rate changes do not reflect what these consumers actually pay because tax credits reduce the cost of coverage below the sticker price and shopping helps consumers find the best deal. Meanwhile, for consumers with employer coverage, premiums have grown at some of the slowest rates on record since the Affordable Care Act was enacted.
“All Minnesota consumers, no matter where they get their coverage, are benefiting from ACA protections like no more exclusions for preexisting conditions, no annual limits on coverage, and no cost sharing for preventive services.”
About 250,000 people, or 5% of the state population, get insurance through the exchanges. Additionally, subsidies are available for people who make $47,520 or less a year, or for a family of four making less than $97,200 in total.
Rothman said that for those not receiving subsidies, the premium increases are “unsustainable and unfair” and called for reform. Unfortunately, on the federal level, the standoff between the Republican-led Congress and President Barack Obama make any reform unlikely until at least after the election in November.
The Centers for Medicare and Medicaid Services, the federal regulator that oversees the marketplaces, has announced reforms that could help alleviate some of the issues and mitigate losses for insurance companies. Additionally, the Health and Human Services Department last week rolled out an initiative to get young people to sign up for insurance through the Obamacare exchanges, which would reduce losses for insurers
These reforms, however, are of little solace for Minnesotans this year.