Minnesota health insurers are seeking bigger premium increases for 2025, including double-digit hikes proposed for many in the individual and small-employer markets.
The proposals, posted online by the Minnesota Department of Commerce, are the latest sign health costs are on the rise as the nation continues to move beyond the COVID-19 public health emergency.
Eagan-based Blue Cross and Blue Shield of Minnesota, the state's largest nonprofit health insurer, is seeking average rate increases of 10% or more in both markets, according to the Commerce Department data.
"The main factors driving the proposed rates are health care costs and utilizations trends, including increasing costs for prescription drugs that treat chronic conditions," Blue Cross said in a statement.
The initial rates, proposed and filed in June, are subject to review by the state Health and Commerce departments. Final figures will be published Oct. 1.
The proposals apply to a relatively small group of Minnesotans, about 163,000 people in the individual market and about 209,000 in small employer health plans. They don't include rates for Medicare, Medicaid and large employer health plans.
Yet, the annual data released from Commerce is one of the few prospective public reports on commercial premium trends in Minnesota. It's followed closely in the individual market, where the federal government orchestrated a sweeping overhaul of coverage in 2014 under the Affordable Care Act (ACA).
"It's probably too early to say too much at this point, but it does look like the increases are due to [medical cost] trend," said Julia Dreier, deputy commissioner of Insurance at the Commerce Department. "The trend's obviously higher, and that's not super surprising given inflation and other things going on in the market."
In Minnesota, most people buying individual market coverage do so through the government-run MNsure health insurance exchange. The proposed rates don't reflect the significant savings many buying on MNsure receive via federal tax credits.
Across the country, many states have not yet released 2025 proposals for individual market rates, said Jared Ortaliza, a researcher with California-based KFF.
"However, in the states with public information, we are seeing that premiums for people who buy their own insurance are often rising between 5% and 15% before accounting for the federal subsidies most people receive," Ortaliza said via email. "Minnesota's premium increases are somewhat lower than what we are seeing in other states so far."
Health care inflation is the main factor, he said. Some insurers say hospitals and health care providers have negotiated higher reimbursement rates. Others have noted the impact of high-priced GLP-1 drugs used to treat diabetes and help people lose weight, citing "increased utilization in 2023 that they expect to continue into 2025," Ortaliza said.
In the early years of the ACA, volatility meant premiums in the individual market weren't reflective of broader trends, but that's changed as the market has stabilized, said Cynthia Cox, a KFF vice president.
"These rate filings have ... been able to illuminate general trends in health care costs that might apply to other markets," Cox said.
In Minnesota, the three largest insurers in the individual market are seeking average increases that range from nearly 8% to nearly 13%. During each of the past two years, by contrast, proposed average increases across these carriers were no higher than 8%.
In the market where small employers buy coverage, the three largest carriers are proposing hikes ranging from nearly 4% to nearly 16%. While comparable proposed rates for previous years weren't available, these insurers generally have received small group rate increases of 2% to 7% in recent years.
Small employer groups typically employ fewer than 50 workers.
Blue Cross requested an average rate increase of 15.78% for small employer customers buying through its health insurance division and 10.47% for those buying the company's HMO coverage. Last year, Blue Cross saw its operating income slip about 40% to $103.7 million, continuing a string of profitable years for the health insurer.
"Our filings also reflect our continued offering of small group plans and individual plans in all Minnesota counties," the insurer said.
HealthPartners and UnitedHealthcare also requested double-digit average increases in the small group market.
In the individual market, the HMO division at Blue Cross proposed the biggest jump at 12.75%. Other average rate increases include: UCare, 8.8%; HealthPartners, 7.69%; Medica, 1.95%; and Quartz Health Plan, 9.35%.
Based in Minneapolis, UCare is the state's largest seller of individual market coverage. The HMO said increased use of medical services and higher reimbursement rates were among the factors driving its proposed increase.
Other factors include state requirements for "lower copays for chronic conditions drugs/supplies, rare disease out-of-network coverage [and] biomarking testing coverage," UCare said in a statement. There are also "new requirements for pharmacy manufacturer copay assistance programs ("coupons") that transfer more costs to insurance carriers."
