Preferring to leave

Pretty much everything that has happened with Minnesota's health insurance exchange (MNsure) has been utterly predictable, given the rush to set up said exchange.

The technical snafus were almost forgivable early on, but they still endure nearly a year later. Then we hear of multiple hour wait times on the phone when customers call for assistance/support. But the coup de grace of absurdity is how applicants did everything they were supposed to do to purchase insurance, yet the payment process was flubbed, leaving many without coverage. 

I guess it's no surprise that one local insurance provider chose to bail on this quagmire. 

It’s a major blow to the MNsure health insurance exchange – the insurance company with the lowest rates and the most customers signed up through MNsure will not be back in 2015.

The decision is expected to have a major impact on health insurance customers and the governor’s race.

Golden Valley-based PreferredOne Health Insurance has notified MNsure and the Minnesota Department of Commerce of their decision through a letter. Sources told KSTP’s Tom Hauser that MNsure CEO Scott Leitz was notified by phone Tuesday morning.

Leitz and PreferredOne CEO Marcus Merz released a joint statement about the decision:

“Today PreferredOne made the decision to not offer health plans through the health insurance exchange in 2015. Simply put, both organizations understand that MNsure is still an evolving partnership. This decision impacts 2015 enrollment. Consumers still have at least four, well-known, Minnesota based carriers who are committed to providing important health coverage to Minnesotans through MNsure, including people who qualify for tax credits and public programs. MNsure and PreferredOne will work closely to minimize impact to current enrollees in a PreferredOne Plan through MNsure.”

The good news for those who like their PreferredOne plan is they can keep said plan when the next enrollment period rolls around (no, really). The bad news is that they will no longer qualify for government subsidies since renewal will have to take place through PreferredOne directly.

Because PreferredOne had the lowest rates, the majority of those who purchased insurance through the exchange had coverage through them.

As of Aug. 6, PreferredOne had 59 percent of the individual market MNsure enrollees. Blue Cross Blue Shield was a distant second at 23 percent, with HealthPartners, Medica and UCare much further back.

Essentially 3 out of every 5 Minnesotans who purchased insurance on the state's exchange will now have to endure the arduous process of re-enrolling with another carrier on MNsure, thus all but guaranteeing their rates increase. But, again, if they choose to stay with PreferredOne, rates increase as well due to the fact they aren't eligible for subsidies or tax credits they might otherwise receive via MNsure.

When he wasn't busy hobnobbing with D.C. elites in an effort to raise campaign cash or inserting himself into the Adrian Peterson discussion, Gov. Mark Dayton managed to cobble together a reaction, something about PreferredOne's move being "competition in action." Ummm....OK. Remember, PreferredOne had the vast majority of business that went through the exchange, so they were already dominating the competition. It was the website's general ineffectiveness that caused them to decide it just wasn't worth the heavy resources being expended. That hardly smacks of a competition issue.

Within an hour or two of this news breaking Tuesday, Dayton's opponent in this year's gubernatorial race, Jeff Johnson, was quick to pounce.

“This is yet another example of everyday, middle-class Minnesotans paying the price for Mark Dayton’s incompetence. Six out of 10 people who’ve purchased insurance through MNsure will now have to go through the nightmare process of purchasing another plan all over again—thanks to Mark Dayton.

We now know that Mark Dayton’s claim about MNsure having some of the lowest rates in the country was artificial and based on a house of cards.

Nobody but Mark Dayton is to blame for this whole debacle. As he always does when his actions hurt Minnesotans, Dayton will try to blame everyone but himself. But he created MNsure and hand-picked its board and staff. This is all on him.”

In a recent poll, Johnson was shown to have been trailing Dayton by double digits (but 20% were still undecided). However, Dayton's approval/disapproval ratings are pretty much split, 46/45. That would seem to indicate many Minnesotans are willing to be convinced to elect a new governor. Given that MNsure was one of Dayton's highly touted pet projects yet has been completely bungled along the way (plus, likely higher rates will be revealed next month), this is as good an enticement for change as any. Hopefully Johnson can capitalize.

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