PreferredOne Health Insurance — which had the lowest costs and most customers of all the insurance companies in MNsure’s first year — says it won’t participate in the state’s health care exchange next year.
A spokesman for PreferredOne, which is based in Golden Valley, told KSTP news that the withdrawal from MNsure is “purely a business decision,” and that continuing in the state’s exchange was “not administratively and financially sustainable going forward.”
The company’s withdrawal will have political ramifications on this November’s election, as Gov. Mark Dayton has been a big MNsure supporter, despite its rocky rollout.
State Republicans wasted no time in weighing in on the matter:
“Earlier this year, Gov. Dayton promised Minnesotans ‘we’re going to make this better.’ My question to Governor Dayton is: when? How long do Minnesotans have to wait?” said a statement from House Republican Minority Leader Kurt Daudt.
Those who signed up with Preferred One last year through MNsure for coverage in 2014 can still renew for next year, but they will not be eligible for the federal health insurance subsidies.
A PreferredOne statement said: “Our MNsure individual product membership is only a small percentage of the entire PreferredOne enrollment but is taking a significant amount of our resources to support administratively. We feel continuing on MNsure was not sustainable and believe this is an important step to best serve all PreferredOne members.”
KSTP said that, as of Aug. 6, PreferredOne had 59 percent of the individual market MNsure enrollees, with Blue Cross Blue Shield at 23 percent. HealthPartners, Medica and UCare had smaller shares.
Rates for those companies continuing with MNsure next year won’t be announced until next month, but are expected to rise.
Speculation
There isn’t much known here which leaves a lot of room for speculation. What could have happened is that PreferredOne entered the market with lowball rates in order to secure market share which proved to be too low to maintain profitability. Rather than raising rates which would have meant losing their price advantage over their competitors, they simply chose to get out of the business. What happened here isn’t the result of some failing of MnSure, as such, it’s just a question of an aggressive business decision that just didn’t turn out the way the business hoped it would. This is the sort of thing that happens in a competitive market, something Republicans endorse wholeheartedly, and Democrats accepted reluctantly in order to get Obamacare passed.
If we don’t want private insurers entering and sometimes leaving the health care market place, we can always enact a single payer system.
I tend to agree, Hiram.
This is the free market at work and there will be other insurers at the ready willing to write new business.
Not Possible
Republicans complaining about a free market failure and wanting the government to step in and fix it!
Which republicans were complaining about this and requesting the government fix this?
Jeremy: Did you not read the article?
“State Republicans wasted no time in weighing in on the matter:
“Earlier this year, Gov. Dayton promised Minnesotans ‘we’re going to make this better.’ My question to Governor Dayton is: when? How long do Minnesotans have to wait?” said a statement from House Republican Minority Leader Kurt Daudt.”
Is Republican Minority Leader Kurt Daudt not looking to “Governor Dayton” a government official for the “government” solution?
Didn’t see where he said, Let the Free Market Fix it, especially since it is a free market system, only facilitated by MNsure.
Other Alternative
I would be surprised if Preferred One’s current decision blindsided MnSure. MnSure must have seen this coming at some point and asked Preferred One to submit new rates justifying their financial and administrative costs for the program. These new rates must have been too high to politically accept. Having Preferred One pull out of the market rather was the lesser of two evils. Of course, this is speculation.
On target
I think you are likely on target, usually a business would never leave a market if they can be profitable. Something is discouraging them from raising their prices as necessary to cover the MN Sure administrative burden.
ACA at it’s finest… A whole government bureaucracy that needs to be paid for by someone.
This Brings to Mind a Promise
“I will sign a universal health care bill into law by the end of my first term as president that will cover every American and cut the cost of a typical family’s premium by up to $2,500 a year.”
Source: Speech, “A Politics of Conscience,” June 23, 2007
To be fair, if you like your PreferredOne plan you can keep your PreferredOne plan, but that price, you can’t keep that. This is the plan that featured the lowest cost, the broadest network, and the largest enrollee population (6 in 10).
The rocky MNSure roll-out continues. “Hey Babe, Get Your Blue Ox Over Here”.