Minnesota state officials initially claimed that their Obamacare exchange’s premiums were going up just 4.5 percent on average, but a more accurate estimate is an almost 12 percent rate hike.
MNsure, the state-run Obamacare exchange, has been touting a press release that the average rate hike on the exchange for 2015 will be just 4.5 percent, but the non-weighted average doesn’t take into account that the plans with the most customers are more drastically increasing their prices.
Four insurers are returning to the Obamacare exchange in 2015, and their rate changes vary: 1.8 percent; 8.1 percent; 17.2 percent; and 9.1 percent. Put it all together, as the Minnesota commerce department did, and you get a 4.5 percent hike.
But a closer look at the numbers shows a much different picture. The one company to lower its rates, UCare, had just 549 exchange customers in 2014 — out of over 55,000. Blue Cross Blue Shield of Minnesota, by comparison, has 23 percent of the exchange’s customers and raised their rates. The commerce department’s analysis weighs Blue Cross Blue Shield’s over 12,000 customers’ rate hikes the same as UCare’s 549 enrollees.
When the number of customers affected is taken into account, Minnesotans who bought plans on their Obamacare exchange can expect their plans to increase 11.8 percent on average. There’s a lot of variation in there — smokers can expect the biggest increases, a small number of customers are up for a rate cut — but many people who bought plans will see their costs rise by double-digits.
Minnesota commerce department commissioner Mike Rothman defended his office’s calculations to Minnesota’s Star Tribune.
“The Commerce Department put out a calculated straight average for people to be able to compare the average that was per company,” Rothman said, “so that people understood that for those companies going back, that that’s what the average was, just straight up.”
And that’s not counting the options that aren’t available anymore. PreferredOne, which attracted the most exchange customers and the lowest prices, pulled out for 2015, calling the cost of insuring exchange customers at the prices the state wanted “unsustainable.” (RELATED: Minnesota’s Biggest (And Cheapest) Obamacare Insurer Drops Out Over Overwhelming Costs)
PreferredOne’s exit complicates things: their plans covered 60 percent of all Minnesota’s exchange enrollees. And, a new insurer, Blue Plus, is beginning to offer plans on the exchange for the first time in 2015. That makes it difficult to compare prices by the number of customers attached to each plan.
But with the lowest-cost plan departing the exchange, at the very least, the 60 percent of Minnesota customers who purchased PreferredOne’s plans are in for an even bigger rate hike than usual if they switch over to a more expensive competitor.
And if customers decide to stay with PreferredOne and purchase their same plan off the exchange in 2015, they can expect an average rate hike of 63 percent, according to the Star Tribune.
The takeaway for Obamacare customers nationwide: if you want to keep your insurance plan from year to year, expect premium hikes.
The Star Tribune noted that although Democratic Minnesota Gov. Mark Dayton said that rate increases would not be released until mid-November — after midterm elections — the department caved to GOP criticism and released its questionable statistics in early October. Dayton is running for reelection against Republican challenger Jeff Johnson, who has criticized the Commerce Department’s analysis.