Minnesota: BCBS dropping out of indy market (UPDATE: Dropping PPOs only)

I'm still waiting on the 2017 requested rate changes for Minnesota's individual market, but there's one carrier which won't be asking for any changes: Blue Cross Blue Shield of Minnesota:

Minnesota's largest health insurer, Blue Cross and Blue Shield of Minnesota has decided to stop selling health plans to individuals and families in Minnesota starting next year. The insurer explained extraordinary financial losses drove the decision.

"Based on current medical claim trends, Blue Cross is projecting a total loss of more than $500 million in the individual [health plan] segment over three years," BCBSM said in a statement.

The Blues reported a loss of $265 million on insurance operations from individual market plans in 2015. The insurer said claims for medical care far exceeded premium revenue for those plans.

This is a big deal, not just because of the number of people impacted, but because, as Sarah Kliff of Vox just noted, this is the first BCBS carrier to drop out of an ACA exchange. (*UPDATE: Incorrect; see update below)

Blue Cross and Blue Shield says the change will affect about, "103,000 Minnesotans [who] have purchased Blue Cross coverage on their own, through an agent or broker, or on MNsure."

...Although Blue Cross Blue Shield is leaving the individual market, its much smaller subsidiary , Blue Plus, will continue to offer plans on the individual market, according to the company statement. Blue Plus, has only about 13,000 members according to his message.

MNsure spokesperson Shane Delaney said about 20,000 Minnesotans purchased Blue Cross and Blue Shield of Minnesota plans through MNsure. He said the vast majority of them qualified for tax credits to help pay premiums.

OK, so for my own future reference re. market share/weighting the average, that's 13,000 currently enrolled via Blue Plus who presumably will be able to renew their policies, plus another 103,000 via BCBSM who will have to shop around, of which about 20K (20,400 to be precise, according to MNsure's most recent monthly report) are enrolled via the exchange.

The MNsure report also suggests that the rest of the breakout is something like:

  • BCBSM: 20,400 (+ 82,600 off exchange)
  • BluePlus: 7,800 (+ 5,200 off exchange)
  • HealthPartners (aka Group Health Plan): 24,600
  • Medica: 20,200
  • UCare: 22,600

Last year Minnesota's total ACA-compliant individual market came to around 284,000 people. Assuming around 10% growth year over year, it should be perhaps 310,000 total today. That leaves around 126,000 unaccounted for above. There's one name missing above: PreferredOne, which dropped out of the exchange a year or two ago and only sells policies directly, so some of those should be found there.

More to the point, BCBSM's 103K represents roughly 21% of MNsure enrollments and 33% of Minnesota's total individual market...so yes, them dropping out is a big deal.

*UPDATE: OK, actually, this isn't true. As Zachery Tracer reminds me, BCBS of New Mexico dropped out of the ACA exchange last year, although they still offered plans off of the exchange. In addition, "Blue Plus" is simply BCBSM's name for their HMO division, which is still offering plans on MNsure...so this is no different from BCBS of Texas, which also dropped their PPOs last year while still offering HMOs.

I'm not trying to downplay the significance of this development--it's still a Big Deal--but it's important to accurately portray the stiuation: They're dropping PPOs but keeping HMOs, which is pretty much what's happening nationwide in general.