Minnesota health insurers are pushing forward with plans to sell coverage in the individual market next year despite the swirl of unanswered questions about the future of the federal health law.
The uncertainty is not just a long-term challenge but also leaves health plans with unanswered questions as they set 2018 prices in an embattled market filled with red ink.
Insurers say they still don't know whether the federal government will enforce rules and provide subsidies that are meant to drive young and healthy consumers into the market. The lack of those coveted consumers seems to be the only thing that everyone agrees on when it comes to the Affordable Care Act (ACA).
"It's driving insurers up the wall," said Roger Feldman, a health economist at the University of Minnesota. "Either the insurers get caught flat-footed by not preparing for the worst, or they prepare for the worst and then it happens."
Insurance company executives in Minnesota don't put that fine a point on the challenge, noting there's been significant uncertainty related to markets under the federal health law for the past several years. But they acknowledge the situation is not ideal.
"The lack of certainty from a regulatory environment creates significant risk, and it's very difficult to run a business that way," said Michael Guyette, the chief executive of Blue Cross and Blue Shield of Minnesota, the state's largest health plan.
The ACA brought sweeping changes to the market where individuals buy health insurance. It's the market primarily for people under age 65 who are either self-employed or don't get coverage from their employer.
Earlier this year, Republicans in the U.S. House passed a bill to repeal and replace the ACA — also known as Obamacare — but the effort bogged down this month in the Senate.
Early last week, Republican leaders in the Senate said there weren't enough votes to pass a bill that would both repeal and replace the law, with conservatives saying the plan didn't go far enough while moderates feared hits to the quality and quantity of coverage.
With the failure of "repeal and replace," Senate Majority Leader Mitch McConnell, R-Ky., said he'd move forward with a vote on a bill that would simply repeal the law without a replacement. But moderate Republicans balked at the idea for fear that even more people would lose coverage.
President Donald Trump weighed in with various messages last week, at one point suggesting Republicans should let the ACA fail — clearly not a happy message for insurers, since the individual benefits provided by the law are delivered through private companies that already have lost money with the market's struggles.
"I think what we're seeing now is a drive towards some sort of bipartisan stabilization going forward, but honestly time is running out," Guyette said Thursday. "So, again, carriers are being asked to make decisions without a lot of direction."
The various proposals at the federal level are more about the long term, insurers say, adding that they've had to focus on how to file rates for next year even though key questions haven't been settled. Insurers had until July 17 to submit filings that specify the health plans they hope to sell plus their justification for proposed premium rates.
Neither state regulators nor insurance companies would discuss particulars, since the filings are confidential at this point. But representatives for the state's four largest health plans in the individual market — Blue Cross, HealthPartners, Medica and UCare — indicated in interviews or statements that they're all planning to return for 2018.
"It does create a lot of uncertainty for the longer run, but for 2018, we had to move forward with the facts that we have," said Donna Zimmerman, a senior vice president with Bloomington-based HealthPartners.
Insurers still don't have definitive answers about whether the federal government will enforce the ACA's rule that almost all Americans have health insurance or pay a tax penalty. It's also not clear whether the government will keep paying "cost-sharing reduction" subsidies that benefit low-income consumers.
If insurers set 2018 prices that assume subsidies will remain and the mandate will be enforced, they could set prices that are low and fail to anticipate how healthy consumers are leaving the market, said Feldman of the U. The end result: big financial losses for the insurers.
But if insurers set high prices to be safe, those premium spikes could drive from the market healthy consumers who decide coverage just isn't worth it.
Another wrinkle is the state's "reinsurance program," which would provide financial protection for health plans that happen to attract enrollees with costly health problems. The state Legislature created the program earlier this year, and it should slow the growth of premiums with the state government funding it with up to $542 million over two years.
But the program is contingent on federal approval. The federal government is taking public comments on the plan through July 30.
"What we need right now is permission to run reinsurance in 2018, because reinsurance is what will make premiums more affordable for Minnesotans," said Jim Schowalter, chief executive of the Minnesota Council of Health Plans, a trade group for insurers.
The state Commerce Department is legally required to release on July 31 proposed rate increases for the individual market. Commerce says it will include proposed rates both with and without the reinsurance program.
This month, Gov. Mark Dayton met with Trump administration officials to discuss the program. In a July 11 statement, a spokesman said federal officials assured Dayton "they would make an expedited review a top priority," and he thanked them for "excellent assistance" on the matter.
Despite all the uncertainties, Commerce told insurers that they must submit rate proposals that are based on existing federal laws and regulations and are justified by sound actuarial data. The rate proposals are now being reviewed by state regulators, with final numbers scheduled for release by Oct. 2.
Last week, Kaiser Health News quoted an insurance company executive in California who called all the uncertainty "insane," especially since the expected Nov. 1 launch of open enrollment for 2018 coverage is just a few months away. Geoff Bartsh, a vice president with Minnetonka-based Medica, didn't dispute the characterization but said the uncertainty isn't new.
"Unfortunately, we're getting a little used to it," Bartsh said.
Last year, carriers in Minnesota jumped after Blue Cross in late June announced it was pulling its popular broad-network health plans that provided coverage to roughly one-third of the individual market. In the wake of the decision, the individual market in Minnesota nearly collapsed — regulators let health insurers cap their enrollment as a result, and health plans overall tightened limits on doctors and hospitals that patients could visit with in-network benefits.
"As a company we can get used to ebbing and flowing with the changes and making the appropriate adjustments, but that doesn't make it any easier for the consumer," Bartsh said. "It seems like every year they're waiting with bated breath — what's my increase going to be? Is my carrier going to be in the market? Is Congress going to make changes to my coverage?"
