By Don Davis
A new way for Minnesotans to buy health insurance could provide the lowest premiums in the country, but when state officials announced those numbers Friday, they could not compare the new prices to what consumers pay today.
Gov Mark Dayton’s administration promoted a comparison showing Minnesota to be the lowest of 17 states that have announced premiums in new marketplaces established to follow the new federal law popularly known as Obamacare.
“I’m here today with good news for Minnesota consumers,” said Commerce Commissioner Mike Rothman, an appointee of the Democratic governor.
“Coverage is going to become much more affordable for a million Minnesotans,” said Executive Director April Todd-Malmlov of the newly formed MNsure insurance marketplace.
Republicans did not see the announcement in such glowing terms.
“These rates are higher than what is currently available on the open market, and even with promises that health care reform will bring more affordability, it seems we were sold a bill of goods,” said Senate Minority Leader David Hann, R-Eden Prairie, a former Senate health care chairman.
The health insurance marketplace, known as MNsure, will begin selling policies offered by existing private insurance companies on Oct. 1. Policies will become effective Jan. 1.
Most Minnesotans receive insurance through their employers, and most are not expected to be affected by MNsure. However, those who buy insurance privately or are on government-funded programs such as Medical Assistance (Minnesota’s version of Medicaid) or MinnesotaCare can use the mostly online marketplace.
Insurance premiums will be subsidized by the federal government for anyone earning less than four times the poverty rate, $94,200 annual income for a family of four.
Some examples MNsure gave for the lowest premiums of basic policies:
– A 25-year-old in southeastern Minnesotan earning $23,000 would pay about $65 a month after federal subsidies reduce the premium.
– In northeastern Minnesota, a family of four with $65,000 income would pay about $300 a month.
– A 60-year-old in the southwest earning more than $46,000 would pay $315 monthly.
– In west-central Minnesota, a 40-year-old with a $45,000 income would pay $135 a month.
– A northwestern Minnesota family of four with a $65,000 income would pay $331 each month.
Minnesotans with incomes below $15,282 receive free health insurance under Medical Assistance. Those earning up to $22,980 qualify for reduced-premium MinnesotaCare. Those with incomes up to $46,960 receive federal assistance to lower their cost.
More than half of Minnesotans probably will receive federal tax credits to reduce insurance cost, Todd-Malmlov said.
Insurers offer policies with four levels of coverage.
Employers with fewer than 50 workers and individuals will be able to use MNsure.
Each Minnesotan will have at least two insurance companies offering policies on MNsure.
Those with the fewest companies offering policies are in the southeast, while five companies will use MNsure to sell policies from the Twin Cities’ north to St. Louis County. Western Minnesotans will have four companies vying for business, while parts of northeastern and south-central Minnesota will have three companies.
Rothman said that people in areas with fewer insurance companies offering policies likely will pay higher premiums.
Officials said better health insurance policies will be available next year. But they said the new policies will be so different that they cannot say if Minnesotans actually will pay less.
Sen. Tony Lourey, DFL-Kerrick, called MNsure “a step forward,” adding that it is impossible to compare today’s privately purchased insurance policies with those soon to be available because federal law made so many changes in what policies must cover.
The new policies will be “better value, better products,” said Lourey, Senate author of the bill authorizing MNsure. “You are going to be better off.”
More information is available at mnsure.org