Minnesota’s insurance marketplace nearly collapsed last year due to high price hikes, and it appears that we haven’t learned from our past mistakes. Commerce Commissioner Mike Rothman announced on Friday that health insurers will be able to raise their prices by at least 50 percent next year. For some, the increases may be as much as 67 percent.
”Last year at this time when rates were announced, I said there was a serious need for reform in Minnesota’s individual market,” said Rothman. “This year the need for reform is now without any doubt even more serious and urgent.”
Under Obamacare, every person in Minnesota must be insured or face a penalty, but there have been little restrictions on the rates insurance companies can charge.
Why The Increases?
According to Rothman, increasing insurance premiums in Minnesota are consistent with national trends, as nearly all states are facing double-digit rate increases. So why are these increases happening? The answer is two-fold:
- Insurance companies claim that medical claims costs are increasing, so they need to raise premium rates to align with expected expenses; and
- There have been cuts to certain federal programs that were designed to stabilize the market and place limits on premium increases for insurers.
Rate increases aren’t the only cause for concern when it comes to finding affordable coverage. Blue Cross and Blue Shield of Minnesota will be leaving the insurance marketplace after suffering financial losses, meaning an influx of patients will be looking for new providers. In an effort to prevent taking on too many new patients or the possibility of overwhelming doctors and hospitals, some carriers plan to limit the number of new members they’ll accept.
“The unhealthy combination of massive cost increases and enrollment caps is creating a health care crisis for thousands of Minnesota families,” said Minnesota State House Speaker Kurt Daudt.
Rothman agrees, saying families are being overburdened by the high costs of insurance premiums in Minnesota.
“Last year at this time when rates were announced, I said there was a serious need for reform in Minnesota’s individual market,” he said. “This year the need for reform is now without any doubt even more serious and urgent.” He called the rising rates “unsustainable and unfair” and said that people were being “crushed by the heavy burden of these costs.”
However, it’s important to remember that you have some options to help offset some of the price hikes. You can apply for a tax credit to offset some of the cost by visiting www.MNSure.org and filling out the online forms. You are eligible for a tax credit as an individual if you make less than $47,520 a year. For a family of four, if your household makes less than $97,200, you may be eligible for a tax credit.