Minnesota Obamacare Exchanges On Brink Of Collapse

Minnesota is currently experiencing difficult growing pains with the Affordable Care Act (ACA), with premiums set to dramatically rise.

On Sept. 30, Minnesota Commerce Commissioner Mike Rothman announced that the state will allow insurers to raise their rates by 50 to 67 percent in 2017.

“It’s in an emergency situation — we worked hard and avoided a collapse,” Rothman said, according to Bloomberg Markets. “It’s a stopgap for 2017.”

The commerce commissioner, who had been appointed by Democratic Gov. Mark Dayton of Minnesota, warned that several of the largest healthcare providers in the state were threatening to pull out in premiums were not raised, citing that they were suffering high costs from not turning away patients with preconditions.

“We succeeded in saving the market for 2017, with only Blue Cross leaving,” Rothman said, according to Business Insider. “But the rates insurers are charging will increase significantly to address their expected costs and the loss of federal reinsurance support.

The federal reinsurance program had provided assistance to insurers who were not seeing a cost benefit to taking on sicker enrollees. The program will expire in 2016, meaning that states will have to start allowing insurance providers to charge higher rates to keep them in business.

“The rising insurance rates and unsustainable and unfair,” Rothman said. “This is a real emergency situation.”

The rising premiums will likely not hurt the wallets of enrollees too dramatically. The majority of Minnesota residents who do not already receive health care through their jobs will be given subsidies to offset the new costs.

“All Minnesota consumers, no matter where they get their coverage, are benefitting from ACA protections like nore more exclusions for preexisting conditions, no annual limits on coverage, and no cost sharing for preventive services,” said Department of Health and Human Services spokesperson Jonathan Gold.

Subsidies will be made available to individuals who make $47,520 or below a year and to families of four making less than $97,200 or below per year.

Chief Executive Janet S. Trautwein of the National Association of Health Underwriters has observed that the ACA is proving difficult for several states to manage.

“Employer markets are fairly stable, but the individual insurance market does not feel stable at all,” Trautwein told The New York Times. “In many states, the individual market is in shambles.”

Richard J. Kirsch, a grassroots activist who fought to have a public option included in the ACA, says that developments in states like Minnesota are evidence that the public option is necessary.

“Supporters of the public option warned that private insurance companies could not be trusted to provide reliable coverage or control costs,” Kirsch said. “There shrinking number of health insurers is proof that these warnings were spot on.”

GOP lawmakers are against a public option and instead want to gut the ACA entirely. Republican Sen. Lamar Alexander of Tennessee stated “Obamacare exchanges are collapsing because of federal mandates and a lack of flexibility. We need to give states more flexibility and individuals more choices so more people can buy low-cost insurance.”

President Barack Obama has defended that ACA, noting that Congress has refused to pass amendments to the sprawling healthcare program.

“In my mind the [Affordable Care Act] has been a huge success, but it’s got real problems,” Obama told New York Magazine. “They’re eminently fixable problems in terms of strengthening the marketplace, improving the subsidies… doing more on the cost containment.”

The President added “you hit a point where if Congress just is not willing to make any constructive modifications and it’s all political football, then you’re getting a suboptimal solution.”

Sources: Bloomberg Markets, Business Insider, New York Magazine, The New York Times / Photo Credit: Dr. Farouk/Flickr