Minnesota: Another STRONG argument to make sure you SHOP AROUND this year!

I just got off the phone with Christopher Snowbeck of the Star Tribune in Minnesota, who informed me that MN has a rather unique state law which, combined with the company dropping out of the ACA exchange, could have a serious impact on up to 23,500 residents who enrolled in policies via PreferredOne earlier this year.

To recap: MNsure, Minnesota's ACA exchange, enrolled roughly 48,500 people in private policies as of April. Unlike the 16% national attrition rate since then, Minnesota's ACA policies have retained 97% of their enrollments as of October (it's still at around 47,000 as of now out of 55,000 total enrollees to date). About 60% (33,000) of the total were through PreferredOne, although according to my sources, a good 10K of these have already moved on to other types of coverage (either a competitor, ESI, Medicare, Medicaid or whatever).

So, that leaves around 23,500 people still currently enrolled in MNsure-based PreferredOne policies as of October 15th.

Still with me? OK, so far, so good.

Now, here's where things get messy:

  • PreferredOne is dropping off of the exchange next year, meaning that all 23,500 of those people will have to either a) switch to another policy from a different company through the exchange, b) switch to some other coverage off of the exchange, or c) do nothing.

In most states, "doing nothing" will result in being automatically renewed in the same policy, which may or may not mean a premium increase, right?

However, in the cae of PreferredOne in Minnesota (and a handful of other states where one or two companies dropped out as well), there is no way of being automatically renewed through the exchange.

Now, in other states, this isn't that big of a deal. The customer will be informed that hey, sorry, your company is bailing, so you'll have to take some action to replace it. Annoying, but not a major problem.

Minnesota, however, has a unique wrinkle: A guaranteed renewal statute. Snowbeck pointed me towards this press release from MNsure & PreferredOne:

"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.

"Consumers currently enrolled in PreferredOne plans should review their options and come to MNsure to shop and compare during the upcoming Open Enrollment period, which begins November 15."

...MNsure remains the only place where consumers can qualify for financial help either through federal tax credits or the MinnesotaCare and Medicaid programs to help pay the cost for their health insurance plan.

To be eligible for financial help, consumers must enroll in a commercial health plan offered through MNsure.

In other words, under state law, PreferredOne is required to let those 23,500 people keep their policies...but not through the MNsure exchange.

If they don't do anything, they'll keep their policies alright...but would also lose their tax credits in the process, because that exact-same-policy would now be off the exchange rather than on it.

Suddenly, instead of paying, say, $200/month for a $600/month policy (with a $400/month tax credit), you're enrolled in the same policy...but paying the full $600/month.

I've said it many times before and I'll say it again:

EVERYONE should log into their account and shop around REGARDLESS of whether they plan on keeping the same policy or not.