What happens when a major insurer leaves a state’s health insurance exchange? Many have their eyes on Minnesota to find out. PreferredOne, MNsure’s top-selling, lowest-cost insurer, announced Sept. 16 that it would not return to the exchange in 2015. The reason given in a letter to MNsure leaders: participating in the exchange is “unsustainable.”
With 2015 open enrollment less than two months away, the news left thousands of Minnesotans wondering what this means for their health insurance coverage and subsidies—and consumers in other states wondering if it could happen to them.
For the most part, carriers have been added to exchanges nationwide. Leaving is not the trend. Three carriers left Covered California, which started with 13 and now has 10. However, they were smaller and accounted for a very small percentage of enrollees. Nearly 1.4 million Californians enrolled in private health plans through the state’s exchange, and 95 percent of them selected coverage from Anthem Blue Cross of California, Blue Shield of California, Health Net and Kaiser Permanente—all of which will sell health insurance through Covered California in 2015.,
In Minnesota, however, more than 50 percent of consumers who purchased private health insurance plans through MNsure selected PreferredOne. As of July, about 24,000 Minnesotans were enrolled in exchange-based PreferredOne plans, which amounted to 53 percent of MNsure enrollees, reported CBS Minnesota.
Still, consumers in Minnesota—and everywhere else in the nation—have options. Four carriers offering multiple plans remain on MNsure—Blue Cross Blue Shield of Minnesota, HealthPartners, Medica and UCare Minnesota. Minnesotans may also shop away from the exchange in the private marketplace through insurers that include Blue Cross Blue Shield of Minnesota, HealthPartners, Medica and PreferedOne.
“The good news for consumers is that they—not the government, not the insurance company—are in charge of their health insurance choices,” said Jeff Smedsrud, HealthCare.com CEO. “Insurance companies may change rates, some may withdraw plans from the exchanges, but nearly every state there are lots of choices for consumers.”
If your health plan leaves, reevaluate your options
In Minnesota, those who want to keep their current PreferredOne coverage may do so, but they will be moved to the private marketplace, which means they will lose their federal subsidies. Those who wish to keep their subsidies must choose a different plan through MNsure.
As explained in a MNsure press release, “All consumers currently enrolled through Preferred One will have continued coverage through their existing plan for the rest of 2014. Under state law, consumers have the right to be renewed into their existing coverage for 2015. However, this mandate does NOT require it to be offered at the same price.”
This applies to any scenario in which a carrier leaves a state-based or federally facilitated health insurance exchange, or in which a specific plan option is no longer available. Consumers will have to make decisions, and those decisions will require careful consideration and research about additional options on and away from their state’s exchange—there are many carriers and plans present in both marketplaces.
“If your insurance company stops offering plans on the exchange, as happened with PreferredOne in Minnesota, each individual needs to do their own assessment: They cannot get a premium subsidy if they continue with that carrier, but [off the exchange] that carrier still might have lower rates and a better network of providers than a competitor,” Smedsrud said. “Consumers need to understand the ‘net cost’ of insurance—the premium minus the subsidy.”
Your subsidy may change, even if your carrier is one that stayed
Another major effect of a carrier’s departure is that people’s subsidies will likely change—even those who were not enrolled plans that left the exchange. In addition to household income, premium tax credits and cost-sharing subsidies are based on the exchange’s second-lowest-cost silver plan. In Minnesota, that second-lowest-cost silver plan belonged to PreferredOne.
“The subsidy calculation is complicated—it is based on personal income, which changes; the premium you pay, which changes; and the price of the second-lowest cost silver plan in your state, which changes.” Smedsrud said.
Even on state-based and federally facilitated exchanges with no carrier movement for 2015, rates are likely to change and impact subsidies. So, even if your carrier and health insurance plan remain on the state’s exchange, you should probably take the time to reconsider your coverage and its costs and see how it stacks up to other plans on and away from the exchange.
The bottom line is that consumers truly need to evaluate all costs involved with health insurance plans (e.g. premium, deductible, coinsurance, copayments, travel to in-network providers and other out-of-pocket expenses), as well as network and overall plan satisfaction, and not limit themselves to the Obamacare exchange.
“The best advice for every individual who pays for health insurance—whether they buy it on-exchange or off-exchange is to compare prices and plans. At least once every year. And always during open enrollment.
“No one can be denied insurance because of health conditions. And everyone is allowed to choose any plan they want during open enrollment.”
To learn more about qualified health plan options in the private marketplace or calculate your exchange-based subsidy, visit HealthCare.com.
 Crosby, Jackie. “Top Selling Insurer on MNsure Won’t Be Back This Year.” Star Tribune. Sept. 16, 2014. http://www.startribune.com/business/275305421.html.  Diamond, Dan. “Most Insurance Exchanges Just Got Bigger. Covered California Is Getting Smaller.” California Healthline. Aug. 13, 2014. http://www.californiahealthline.org/road-to-reform/2014/most-insurance-exchanges-just-got-bigger-covered-california-is-getting-smaller.  Covered California. “Covered California’s Historic First Open Enrollment Finishes with Projections Exceeded …” April 17, 2014. http://news.coveredca.com/2014/04/covered-californias-historic-first-open.html.  Diamond, Dan. “Most Insurance Exchanges Just Got Bigger. Covered California Is Getting Smaller.” California Healthline. Aug. 13, 2014. http://www.californiahealthline.org/road-to-reform/2014/most-insurance-exchanges-just-got-bigger-covered-california-is-getting-smaller.  CBS Minnesota. “MNsure: Help Coming for PreferredOne Customers.” Sept. 17, 2014. http://minnesota.cbslocal.com/2014/09/17/mnsure-ceo-help-coming-for-preferredone-customers/.  MNsure. “Joint Statement from MNsure and PreferredOne Regarding PreferredOne’s Decision to Not Offer Health Plans through MNsure in 2015.” Sept. 16, 2014. https://www.mnsure.org/news-room/news/news-detail.jsp?id=486-141240.