On behalf f Minnesta cnsumers, the Minnesta Department f Cmmerce thrughly reviews prpsed health insurance rates and plans submitted by insurance cmpanies t ensure that the rates are justified and the plicies cmply with state and federal law. The Department has cmpleted its review fr 2016 individual and small grup health insurance plicies that will be available during the pen enrllment perid frm Nvember 1, 2015, thrugh January 31, 2016. (The individual market rates d nt apply t mst Minnestans, wh receive their health cverage either thrugh their emplyer r thrugh public prgrams like Medicare, Medicaid and MinnestaCare.) As f September 30, many states had nt yet released their final 2016 rates fr the individual market. Hwever, based n states 2015 rates and substantial prpsed increases fr 2016, Minnesta s rates are expected t remain the lwest in the Upper Midwest and amng the lwest in the natin. Minnesta Rates Will Stay Lwest in Upper Midwest mn.gv/cmmerce In accrdance with the the Americans with with Disabilities Act, Act, this this infrmatin is is available in in alternative frms frms f f cmmunicatin upn cmmunicatin request by calling upn request 651-539-1500. by calling 651-539-1500.
Minnesta s Health Insurance Landscape The percentage f Minnestans withut health insurance cverage has reached an all-time histric lw level f 5.9 percent significantly belw the natinal uninsured rate f 10.4 percent. Minnesta s uninsured ppulatin has declined dramatically in recent years, with many mre Minnestans having vital access t the benefits and security f health cverage. Minnesta s Uninsured Rate Is at an All-Time Lw Mst Minnestans cntinue t receive their health insurance cverage thrugh emplyer-based plans. These include plans that an emplyer purchases frm an insurance cmpany t cver emplyees. They als include plans that are self-funded generally, a large emplyer that accepts direct financial liability fr the csts f claims (thugh enrllment, claims prcessing and ther peratins may still be administered by an insurance cmpany). mn.gv/cmmerce 2
Many ther Minnestans receive their cverage thrugh public prgrams such as Medicare, Medicaid and MinnestaCare. - Medicare is the federal health insurance prgram fr peple wh are 65 r lder, as well as fr certain yunger peple with disabilities and peple with End-Stage Renal Disease. - Medicaid (knwn in Minnesta as Medical Assistance) is a jint federal-state prgram that helps with medical csts fr peple with lw incmes. - MinnestaCare is a subsidized premium-based prgram fr lwer-incme Minnestans wh d nt qualify fr Medicaid and d nt have access t affrdable insurance cverage. Fewer than six percent f all Minnestans purchase their health insurance n the individual market either thrugh MNsure r directly frm insurance cmpanies r brker/agents. Many peple wh buy their individual health plans thrugh MNsure als qualify fr federal financial assistance that lwers their mnthly premiums and helps ffset the impact f rate increases. mn.gv/cmmerce 3
Small Grup Market Small grup health plans are designed t prvide cverage fr businesses with tw t 100 full-time emplyees. They are sld bth thrugh MNsure and directly by insurance cmpanies and brker/agents. Abut 5.4 percent f all Minnestans receive cverage thrugh small grup plans. Ten cmpanies are apprved t sell small grup health plicies in Minnesta in 2016: - Blue Crss and Blue Shield f Minnesta - Blue Plus - Federated Mutual Insurance Cmpany - Gundersen Health Plan Minnesta - HealthPartners Inc. - HealthPartners Insurance Cmpany - Medica Insurance Cmpany - PreferredOne Cmmunity Health Plan - PreferredOne Insurance Cmpany - Sanfrd Health Plan The final rate changes fr 2016 plans ffered by cmpanies in Minnesta s small grup market range frm a decrease f 12.6 percent t an increase f 5.6 percent. On average, Minnesta s small grup rates in 2016 will be nly 1.29 percent higher than in 2015. Each insurance cmpany s final average rate change is listed in the table n page 5. Small Grup Rate Increases Cntinue t Decline mn.gv/cmmerce 4
The small grup rate increases fr 2016 cntinue a recent trend in which these rates are increasing much mre slwly cmpared t several years ag, when they were grwing at 7-10 percent annually. As a result, small businesses in Minnesta are experiencing price cnsistency in their emplyee health cverage that allws fr imprved year-t-year business planning and financial stability. Minnesta Small Grup Health Insurance Plicies 2016 Average Rate Changes Cmpany Name Final Average Rate Change Blue Crss and Blue Shield f Minnesta -4.8% Blue Plus +1.4% Federated Mutual Insurance Cmpany -12.6% Gundersen Health Plan Minnesta +5.0% HealthPartners, Inc. +5.2% HealthPartners Insurance Cmpany +5.6% Medica Insurance Cmpany +4.5% PreferredOne Cmmunity Health Plan +3.0% PreferredOne Insurance Cmpany +5.0% Sanfrd Health Plan -3.4% Individual Market The individual market fr health insurance is available fr Minnestans wh d nt have access t emplyer-based cverage and are nt eligible fr cverage thrugh public prgrams like Medicare, Medicaid and MinnestaCare. (When applying t purchase an insurance plicy thrugh MNsure, eligibility fr Medicaid r MinnestaCare is autmatically determined.) Abut 5.5 percent f all Minnestans purchase their health insurance n the individual market. Eight cmpanies are apprved t sell health insurance plans t Minnestans in 2016 in the individual market. - Blue Crss and Blue Shield f Minnesta - Blue Plus mn.gv/cmmerce 5
- Grup Health, Inc. - HealthPartners Insurance Cmpany - Medica Health Plans f Wiscnsin - Medica Insurance Cmpany - PreferredOne Insurance Cmpany - UCare Cnsumers will be able t purchase individual market insurance plans either thrugh MNsure r directly frm the insurance cmpanies r insurance brker/agents. The final rate increases fr 2016 plans ffered by cmpanies in Minnesta s individual market range frm 14 percent t 49 percent. Each insurance cmpany s final average rate increase is listed in the table n page 7. Many Minnestans wh purchase individual plicies thrugh MNsure will be eligible fr federal tax credits that will lwer their mnthly premiums and help ffset the impact f rate increases. Eligibility fr the tax credits is autmatically determined when applying t purchase a plan thrugh MNsure. Sme key factrs that insurance cmpanies cite fr their rate increases in Minnesta s individual market include: - A higher percentage f less healthy, mre cstly enrllees than expected entered the individual market. - Insurers incurred significantly higher claims than expected fr medical care and prescriptin drugs, especially high-cst specialty drugs. - Minnesta has a relatively small individual market cmpared t ther states, resulting in a smaller risk pl acrss which insurers can spread their csts. In 2014 and s far in 2015, Minnesta insurers in the individual market have paid mre in claims than they have received in incme frm premiums. Althugh insurance cmpanies are nt permitted t charge rates in 2016 t recver csts frm previus years, their prir claims experience in the individual market infrms their expectatins f what csts they may incur in 2016. mn.gv/cmmerce 6
Minnesta Individual Health Insurance Plicies 2016 Average Rate Changes Cmpany Name Blue Crss and Blue Shield f Minnesta Final Average Rate Change +49.0% Blue Plus +45.0% Grup Health, Inc. +31.3% HealthPartners Insurance Cmpany +32.2% Medica Health Plans f Wiscnsin +14.2% Medica Insurance Cmpany +15.6% PreferredOne Insurance Cmpany +39.0% UCare +27.3% Essential Health Benefits Cmprehensive Cverage fr All Starting in 2014, the Affrdable Care Act requires that all health plans ffered in the individual and small grup markets prvide a cmprehensive package f items and services, knwn as essential health benefits. N matter what plan yu chse, yu will have standardized cverage fr these essential health benefits with n dllar limits n the cverage. The essential health benefits are designed t prtect cnsumers and prvide a basic level f cverage in 10 categries f benefits: 1. Ambulatry patient services 2. Emergency services 3. Hspitalizatin 4. Maternity and newbrn care 5. Mental health and substance use disrder services, including behaviral health treatment 6. Prescriptin drugs 7. Rehabilitative and habilitative services and devices ((services and devices t help peple with injuries, disabilities r chrnic cnditins gain r recver mental and physical skills) 8. Labratry services 9. Preventive and wellness services and chrnic disease management 10. Pediatric dental and visin services mn.gv/cmmerce 7
Metal Levels A Cnsumer-Friendly Way t Cmpare Plans Minnesta cnsumers have the ptin t chse frm fur categries f health insurance plans in the individual market. These are knwn as metal levels brnze, silver, gld and platinum. The difference in the metal levels is the percentage f average verall csts paid by the insurance cmpany versus the cnsumer. If yu chse a plan at a higher metal level, yu will pay a higher mnthly premium but a lwer ut-f-pcket amunt in deductibles and cpayments. Brnze the plan cvers 60% f expected csts Silver the plan cvers 70% f expected csts Gld the plan cvers 80% f expected csts Platinum the plan cvers 90% f expected csts Lwest Mnthly Premiums T prvide an example f premium csts in 2016, the table belw shws the lwest mnthly base rates amng the individual market plans that will be available in the Minneaplis/St. Paul Metr Area. mn.gv/cmmerce 8
Fr many cnsumers, actual mnthly premium csts will be lwer than these listed rates because federal financial assistance is available fr individual plans purchased thrugh MNsure. In sme cases, federal financial assistance is als available t lwer ut-f-pcket csts such as deductibles and cpayments. When applying t purchase a plan thrugh MNsure, eligibility fr this financial assistance is autmatically determined. Cnsumer Chices Thrughut Minnesta T secure the best value fr their health care needs, Minnesta cnsumers are urged t shp arund. The individual health insurance market in 2016 will feature a wide range f chices amng insurance cmpanies and prducts. Als, the lwest-cst plans in 2016 fr cnsumers may n lnger be what the lwest-cst plans were fr them in 2015. It is imprtant t d cmparisn shpping. Eight insurers will cmpete fr Minnesta cnsumers in the individual market, ffering a ttal f 379 plans. Maps n pages 9 and 10 shw the number f insurance cmpanies serving each cunty, as well as the specific insurance cmpanies and ttal number f plans available in each rating area f the state. While insurers can cmpete against ne anther, all must prvide cverage fr the cmprehensive set f essential health benefits required by law. Insurers are als n lnger allwed t deny cverage r charge higher premiums t cnsumers based n pre-existing health cnditins. mn.gv/cmmerce 9
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Minnesta s Effective Rate Review Prcess A lngtime natinal leader in insurance rate review, the Minnesta Cmmerce Department has a federally-certified effective rate review prgram with a team f actuaries and experts wh clsely scrutinize the assumptins and infrmatin used by health insurers t develp their rates. Public health and regulatry experts als review the insurance cmpany filings t ensure the adequacy f prvider netwrks and cmpliance with state and federal laws that prtect cnsumers, such as cverage f pre-existing health cnditins and free preventive care. On behalf f Minnesta cnsumers, the Cmmerce Department cnducts a careful, detailed review f each insurance prpsal t ensure that rates are justified. Rates must be justified bth in terms f the value f the benefits that cnsumers receive fr their premiums and in terms f the insurance cmpany s ability t pay expected medical claims csts and fulfill its bligatins t the cnsumers wh purchase the cmpany s plan. By law, rates can be neither excessive (with premium csts exceeding the value f benefits) nr inadequate (with premium incme that is insufficient t cver the cst f medical claims). Fr the first time this year, Minnestans had the pprtunity t see infrmatin in advance abut the rates being prpsed by the insurance cmpanies. And fr the first time, Minnestans had the pprtunity t participate in the rate review prcess by submitting public cmments t the Cmmerce Department. Bth were significant steps frward in public transparency and participatin. Need fr Refrm The substantial insurance cmpany rate increases in Minnesta s 2016 individual market indicate the need fr refrm, including new state-level tls t hld dwn future rates. Pssible ptins include: - A new reinsurance-type prgram fr the individual market that prvides a backstp, spreading the risk s insurers d nt have t raise rates t cver large claims csts. - Risk adjustment mechanisms that spread the financial risk that insurers bear when they have mre high-cst enrllees. - Plicies t fster greater price transparency and cst cmpetitin amng insurers and health care prviders. - Clser mnitring f insurance cmpany financial reserves and prfits, with the pssibility f establishing maximum threshlds, r caps, t prevent excessive reserves. mn.gv/cmmerce 12
Frequently Asked Questins - Health Insurance Rate Review What are the Nine Rating Areas? Area 1 Ddge Fillmre Freebrn Gdhue Hustn Mwer Olmsted Steele Wabasha Winna Area 2 Carltn Ck Itasca Kchiching Lake Lake f the Wds St. Luis Area 3 Blue Earth Faribault Waseca Le Sueur Martin Nicllet Rice Watnwan Area 4 Brwn Cttnwd Jacksn Lincln Murray Nbles Pipestne Redwd Rck Area 5 Big Stne Chippewa Kandiyhi Lac Qui Parle Lyn McLed Meeker Renville Sibley Swift Yellw Medicine Area 6 Becker Clay Duglas Grant Otter Tail Ppe Stevens Traverse Wilkin Area 7 Aitkin Beltrami Cass Chisag Crw Wing Hubbard Isanti Kanabec Mille Lacs Mrrisn Pine Rseau Tdd Wadena Area 8 Anka Bentn Carver Dakta Hennepin Ramsey Sctt Sherburne Stearns Washingtn Wright Area 9 Clearwater Kittsn Mahnmen Marshall Nrman Penningtn Plk Red Lake mn.gv/cmmerce 13
What is an "effective" rate review prgram? Minnesta has been designated by the federal gvernment as a state with an effective rate review prgram. This means that all prpsed rate increases are scrutinized by expert actuaries in the public interest t make sure the rates requested are justified. The rate review evaluates whether prpsed rates prvide reasnable value fr the benefits that cnsumers receive fr their premiums. It als evaluates whether insurance cmpanies will be able t pay the expected medical claims csts and fulfill their financial bligatins t the cnsumers wh purchase their plicies. Hw des an "effective" rate review system perate? Under federal requirements, an effective rate review system must d the fllwing: Receive sufficient data and dcumentatin cncerning rate increases t cnduct an examinatin f reasnableness f the prpsed increases. Cnsider the factrs belw as they apply t the rates: Medical cst trend changes by majr service categries Changes in utilizatin f services (i.e., hspital care, pharmaceuticals, dctrs ffice visits) by majr service categries Cst-sharing changes by majr service categries Changes in benefits Changes in enrllee risk prfile Impact f ver- r under-estimate f medical trend in previus years n the current rate Reserve needs Administrative csts related t prgrams that imprve health care quality Other administrative csts related t prgrams that imprve health care quality Other administrative csts Applicable taxes and licensing r regulatry fees Medical lss rati The impacts f gegraphic factrs and variatins The impact f changes within a single risk pl t all prducts r plans within the risk pl; and The impact f reinsurance and risk adjustment payments and charges under sectins 1341 and 1343 f the Affrdable Care Act. Make a determinatin f reasnableness f the rate increase under a standard set frth in state statute r regulatin. mn.gv/cmmerce 14
Pst any rate filings that increase rates 10% r mre n their websites r pst a link t the preliminary justificatins that appear n the federal RateReview.Healthcare.gv website. Prvide a mechanism fr receiving public cmments n prpsed rate increases. Reprt results f rate review t CMS fr rate increases subject t review. What was the timeline fr reviewing 2016 prpsed rates? May 18, 2015 Minnesta insurance cmpanies submit their health plans and prpsed rate increases fr review by the Minnesta Cmmerce Department. Early June 2015 Plans with prpsed rate increases f 10 percent r mre becme public n the federal RateReview.Healthcare.gv website. The psted infrmatin submitted by insurance cmpanies includes plan summaries and justificatins fr the prpsed rate increases. June-July 2015 Minnestans have the pprtunity t submit public cmments t the Cmmerce Department n the insurance cmpany plans and prpsed rates. June-September 2015 Rate review team cnducts rigrus and thrugh review f insurance cmpany filings. Octber 1, 2015 Apprved plans and final rates are annunced by the Cmmerce Department. Nvember 1, 2015 January 31, 2016 Open enrllment perid fr Minnestans t purchase 2016 health insurance plans n the individual market, either thrugh MNsure r directly frm insurance cmpanies r brker/agents. Wh reviews the rates? Health insurance rates are reviewed by the experts in the actuarial unit at the Minnesta Department f Cmmerce. The Cmmerce Department als reviews the rates submitted by Health Maintenance Organizatins (HMOs) under an interagency agreement with the Department f Health. 15 mn.gv/cmmerce
Must health insurance cmpanies submit rate filings each year? Health insurance cmpanies need t submit rate filings fr new plans and if they are requesting change in rates fr an existing plan. What plans are reviewed? All health insurance rates must be apprved by the Minnesta Department f Cmmerce r the Minnesta Department f Health prir t becming effective, as required in Minnesta Statute sectin 62A.02. Self-insured health plans (generally prvided by larger emplyers) are nt regulated by the state. Are any health plan rates nt subject t review? Rates that stay the same frm year-t-year are nt generally subject t review if the health insurance plan has nt changed. Any rates that have increased r are new must be apprved by the Department f Cmmerce r Department f Health. Hw des rate review affect my premium? The terms rate and premium are ften used interchangeably when discussing insurance. Hwever, thse terms represent tw different things. Rate: A rate is the average that an insurance cmpany charges fr a defined package f health insurance plans. Fr example, the rate fr yur insurance might be $300 per persn per mnth. Premium: The amunt that yu pay fr health insurance. Fr example, if a plan cvers five peple at a rate f $300 per persn per mnth, the premium is $1500 per mnth. Hw ften can premiums g up? In 2014 and later, rates fr individual health plans will change nce a year, n January 1. Rates fr small emplyer grup cverage can change n a quarterly basis. What factrs affect rates? Individual and small grup rates are based n a particular plan f benefits with a particular netwrk f dctrs and hspitals based n the cmbined medical csts f everyne in that cmpany s market fr a particular age, tbacc use and gegraphic area. This is called adjusted cmmunity rating the rates are based n the csts f the entire cmmunity. 16 mn.gv/cmmerce
The rising csts f medical care and prescriptin drugs affect rates. With cmmunity rating, yur premium may g up even if yu haven t received any medical services, if the average cst f services has increased. What factrs affect my premiums? In general, hw much a health plan cmpany charges depends n the fllwing: Yur age and the age f any family members in yur plan; Whether r nt each persn 18 r lder uses tbacc; Where yu live; and The benefits and netwrk f prviders. Yur premium cannt be based n whether yu have a pre-existing health cnditin. Why did my health insurance premiums g up when I didn t have any claims (didn t see a dctr, g t the hspital r get any prescriptins)? Yur premium will nt g up slely because yu have claims, just as it will nt g dwn slely because yu d nt have claims. Insurance is a pling f risks, s individuals pay a share f the pled experience in exchange fr nt assuming the full risk f their wn medical csts. If yu have an individual r small grup plicy, yur premium is based n the claims f everyne in yur market. If yu have cverage under a large emplyer health plan, yur premium is based in part n the claims f everyne in the grup. Hw d insurance cmpanies develp rates? Cmpanies develp rates using estimates f future claim csts, administrative expenses and hw much reserves they need t hld. Rates cannt be based n recvering financial lsses frm previus years. Claim csts: The amunt a cmpany expects t pay fr health care services and gds, such as physician services, hspital fees and prescriptin drugs, n behalf f all plicyhlders with similar plicies. Administrative expenses: The cst f running a health plan. These csts can include: salaries f emplyees; csts t maintain cmputer systems t pay claims; csts t manage the prvider netwrk (fr example, signing up dctrs, hspitals and pharmacies); 17 mn.gv/cmmerce
cmmissins fr agents and brkers (called prducers ); rent; taxes, fees, and assessments that health plans pay t the State r federal gvernment; and ther csts t administer the plicy (fr example, fraud detectin and preventin activities). Cntributin t reserves: Mney that an insurance cmpany has left after paying fr claims and administrative expenses. The reserves are needed t pay fr claims and administrative expenses in years when the plans d nt cllect enugh premiums t cver thse csts. What d yu cnsider when reviewing a rate request? All health plan rate filings must meet these criteria: Anticipated lss rati meets the state's minimum f 71% t 82%; Rates are sufficient t cver expected claims and expenses; Rates prvide a reasnable value t the insured; and The filing is cmplete, crrect, and understandable In rder t demnstrate that the abve criteria are met, the filing must include at least the fllwing infrmatin: Histrical infrmatin, such as when issued, any changes in benefits, rates, r prfitability; Histrical experience including premiums, claims and enrllment; Statistical reliability f histrical experience; Assumptins used in prjecting the future lss rati anticipated changes in claim cst per persn and enrllment. The reasns fr a rate increase, such as benefit changes, ppulatin changes, tax and fee changes. Hw des the Cmmerce Department decide whether t apprve r bject t a requested rate change? Apprved- If the filing is clear and justifies the filed rates, the filing is apprved and the cmpany is ntified that the rates may be used. Objectin- If the infrmatin in the filing is nt clear r des nt justify the filed rates r rate increase, the Department f Cmmerce sends an bjectin letter t the filing cmpany. This bjectin must be sent within 60 days f when the Cmmerce Department receives the filing. If n bjectins are sent within 60 days the rates are deemed apprved, which means the cmpany can g ahead and use them. The filing cmpany then has 30 days t prvide a cmplete filing, r the filing may be clsed withut apprval. 18 mn.gv/cmmerce
If the filing cmpany fails t justify the filing within the 30 days r any lnger perid apprved by Minnesta Department f Cmmerce, the filing is permanently clsed. After the filing is clsed, the cmpany can make anther rate filing. D rate changes always get apprved? N. A decisin is made fr each filing as t whether the rate is apprved r nt apprved. What if the insurance cmpany disagrees with the decisin? The cmpany can request a hearing, and have a judge decide whether the Department's decisin nt t apprve a filing was reasnable r unreasnable. What is the public s rle in the rate review prcess? Fr the first time this year, the Minnesta public had access t infrmatin submitted by insurance cmpanies fr their plans with prpsed rate increases f 10 percent r mre. This infrmatin was psted n the federal RateReview.Healthcare.gv website in early June 2015. Minnestans als had the pprtunity t submit cmments t the Cmmerce Department abut the rate prpsals. Wh can I cntact if I have questins abut the rate review prcess? Yu can call the Department f Cmmerce at 651-539-1600 r 800-657-3602 (Greater Minnesta) mn.gv/cmmerce 19