Some Carriers Opt Out of Minnesota Insurance Marketplace

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With just four months to go before Minnesota’s health insurance exchange goes live, it remains to be seen how many new choices consumers will get.

The companies that will offer competing plans via MNsure haven’t been announced. But three health insurance companies – including Minnetonka-based UnitedHealth Group – say they’ve decided not to compete in portions of the new marketplace, at least for policies that cover 2014, the St. Paul Pioneer Press reported.

The Commerce Department predicts consumers will still benefit from significant competition, even if some carriers opt out. It also says nine companies have applied for approval to sell in the individual and/or small employer marketplaces, though the department won’t name them.

“Based on information to date, the department expects that the market both inside and outside MNsure will be at least as competitive as the current market,” the department said in a statement.

Individuals and small businesses can start shopping MNsure in October for policies that take effect Jan. 1 as part of the federal health care overhaul. Minnesota has opted to run its own exchange rather than leaving it the federal government.

Minnesota’s traditional private health insurance market will operate next year alongside the new exchange. People already covered by large employers or Medicare won’t shop on the exchange for 2014, but the exchanges are expected to attract a large number of currently uninsured consumers.

Last Thursday, UnitedHealth Group, one of the nation’s largest health insurers, said it would participate in just a dozen state-level exchanges due to concerns that new enrollees would have pent-up demands for costly services.

Insurance companies suffer financially when they have a disproportionate number of patients with big medical bills, and that’s one reason insurers might opt-out during the first year of the exchanges, said Stephen Parente, a health policy expert at the University of Minnesota.

Federal officials contend, however, that consumers will find more choices, particularly in the individual market. A White House report identified Minnesota as one of 29 states in which just one insurer covered more than 50 percent of all enrollees in the individual market.

“Consumers in the individual market have long had only limited – if any – choice among plans,” the document stated.

Eagan-based Blue Cross and Blue Shield of Minnesota, as well as Minnetonka-based Medica and Golden Valley-based PreferredOne, say they have filed plans to compete in both the individual and small business exchanges for 2014. Bloomington-based HealthPartners says it wants to participate in the individual exchange but not the small business exchange. Minneapolis-based UCare plans to enter the individual market for the first time by way of the exchange.

Besides UnitedHealth, two smaller companies that currently operate in the market are opting out from portions of Minnesota’s exchange. Owatonna-based Federated Mutual Insurance says it won’t participate in the small employer health exchange, and Milwaukee-based Assurant Health says it won’t participate in either until 2015.

MNsure Executive Director April Todd-Malmlov says the fact that a few insurers have opted not to participate is not necessarily a problem.

“I don’t think you need every carrier in the market to participate; you just want to make sure that you have competition that’s there,” she said.