Approximately four percent of Minnesotans rely on individual health insurance. For a variety of reasons, their insurance premiums have more than doubled in the past few years, making it unaffordable.
These individuals received some relief from the State of Minnesota for 2018-2019 through the Premium Security Plan – it expires at the end of 2019.
What options are available for 2020 and after?
Option 1: Continue the Premium Security Plan and have private individual insurance pay 175-225% of what Medicare pays for the same care, and then have government continue to subsidize the cost of these expensive claims.
Without this plan, tens of thousands more people may have gone uninsured or ended up on government health plans. Providers benefited from this program as it did not reduce their fee schedules. If individuals had, instead, enrolled in government health plans, these plans would have reduced the payments to providers by 50% or more over night.
Option 2: Have individual health insurance policies pay providers at the Medicare allowable price. This could reduce premiums by as much as 50%, without any government subsidies. Providers would collect far less than what they receive from private insurance (but more than what they would receive from Medicaid or MinnesotaCare).
Option 3: Compromise between these two reimbursement schedules (Medicare and private insurance) by choosing the mid-point of what Medicare allows and what private insurance is paying. This, too, would reduce premiums and limit the government subsidy, and allow providers to adjust to a more moderate reduction