Obamacare

Minnesota's Biggest Obamacare Insurer Leaves Exchange

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PreferredOne was the least expensive insurer in the Minnesota's state-run Obamacare exchange last year. It was also the most successful at signing up customers, capturing 59 percent of the state's market for private plans, according to CBS Minnesota. 

And now it's leaving the exchange, and the 30,000 people who had enrolled in its coverage. 

As Jed Graham from Investor's Business Daily explains, this was due to an unusual feature of Obamacare in Minnesota—the existence of a "basic health program" option for lower-income households. 

In 2015, well more than half of MNsure exchange subsidies won't go to insurers on the exchange, but to a public program serving households that fall between the cut-off for Medicaid and 200% of the poverty level.

To date, this MinnesotaCare program for households above 138% of the poverty level has signed up 72,000 people vs. just 55,000 for the subsidized exchange.

The state was the first to embrace the Affordable Care Act's little-known basic health program option, allowing for subsidies to be used in this way. New York state's 2015 budget authorized the creation of a basic health program, so it may be the second to take the plunge.

Given PreferredOne's dominant position on Minnesota's exchange, it stands to reason that the insurer sees no great opportunity to be had.

The state's embrace of the basic health program has not only narrowed the potential exchange pool to households above 200% of the poverty level, but it seems it may have skewed the demographics somewhat older.

A statement from the company indicated that support costs for the exchange plan were too high. "Continuing on MNsure [the state exchange] was not sustainable," the statement said

The basic health plans were supposed to mitigate "churn" in the health insurance market, where income changes throughout the year often mean that low-income individuals end up switching back and forth between various forms of insurance as their incomes move up and down across eligibility borders. But they may end up turning off insurers from participating by limiting the number of people who end up looking to buy private insurance. 

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  1. Prog: So… market failure?

    1. I’m sure this just proves that single-payer NHS-style is best. Somehow.

      1. The VA is our model. So saith Krugman the Infallible.

        1. I think it’s great that we have the guy that P&G just fired taking over the VA. I know it sounds bad, but getting fired from the public sector still makes you 10,000 times better than someone with massive success in the public sector.

    2. So how is this “Basic Health” system different than the Public Option that the entire fucking country rebelled over and politicians insisted was scrapped?

      1. Because it’s not called a public option. If you start giving actual meaning to words, you’ll never understand the Left.

  2. Henry Waxman would have known how to deal with these people.

      1. Mole poison….!

  3. The basic health plans were supposed to mitigate “churn” in the health insurance market, where income changes throughout the year often mean that low-income individuals end up switching back and forth between various forms of insurance as their incomes move up and down across eligibility borders.

    How the fuck is this a real thing?

    1. If you look at the whole thing as a guaranteed wealth transfer to Insurance Company shareholders, it all makes much more sense.

      1. Do people really have enough time to constantly change health plans based on sinusoidal income levels?

        1. It’s not a question of time.

          During my divorce, the DOR received reports about the income levels and the number of people living in my household which oscillated wildly over a period of months. These reports were filed by insurance companies and employers.

          As a result the DOR kept automatically enrolling and disenrolling my children in Masshealth (our version of medicaid). The best part was when a paperwork error somewhere got me a nasty-gram (my soon to be ex was reported as an active employee when in reality she had been fired several months earlier of her last job) demanding that we pay for any medical services we had consumed (luckily we hadn’t had to take the kids to the doctor, so the whole thing was moot).

          At first, I would call the DOR and try to get the mess straightened out, and on average it would take two attempts, with hold times of several hours to get a human being. Once I got a human being I would be given explanations and directions that were wrong as often as right.

          Eventually I stopped responding to the notices. We weren’t consuming medicaid services, and I wanted my life back. I think it took a year for them to fix the broken reporting system at which point I stopped getting the notices.

          In my case, I wasn’t lifting a finger, but there was a hell of a lot of churn since my medicaid insurance provider was a private one getting paid by the state.

          1. Holy ass!

          2. If only a federal agency like the IRS had been in charge. It would’ve worked out great.

    2. Don’t you constantly hear people at the lower end of the socio-economic ladder say “I am marginally better off” when shopping for groceries? Listen harder.

      1. I lol’d!

  4. Paging Dave Weigel. Dave Weigel, please pick up the white courtesy phone.

  5. Look, if we just had full on communism, we’d be passed all this shit by now.

    /i know what socialism is derp

  6. Obviously an unpatriotic company. I’m sure a full IRS audit is in order; along with various other investigations from various Feds.

    1. Hoarders, wreckers, and Kulaks!

    2. If you flee to Canadaland, to get that totally sweet “free” healthcare – how is that different from fleeing to Canadaland for that totally sweet low taxes?

      1. Only one of those things shows the proper reverence to Almighty Government, blessed be It forever.

      2. Because when you get ill or injured and see the wait time for proper medical care in Canada, you will come running home. When you see your lower tax bill, you won’t.

  7. No one walks away from Obamacare. Nobody. UNLEASH THE BIDEN!

    1. He will hunt you to the pits of hell he will!

      1. but only after he waxes his sweet Trans Am.

        1. ….and offends the Jooos and Orientals in swift succession!

  8. Not sure I follow.

    MN setup a public option for poor people (defined as 200% poverty level). Poor people are flocking to it. That leaves less people to signup for private insurance. Private insurer exits program because of low demand for private plans.

    Is that what happened?

    1. Also, as I understand it, there are far fewer people than they suspected who spend part of the year making more than 200% of the poverty level and part making less (this was the “churn” as I understand it.)

    2. Nah. What happened (I think) is, the state is hogging the “risk corridor” subsidies/graft, and the insurer wasn’t viable without a full helping of graft.

  9. The thing to remember when reading these stories is that as originally designed, Obamacare was supposed to have a public option. The idea was to drive insurers out of the health insurance market and force people on the public option until you ended up with a critical mass and de facto single payer. Stripping out the public option to pass Obamacare was a monumental blunder. Now, instead of forcing people into the public option and paving the way for single payer, they are just forcing people off insurance and creating a national disaster that is likely to discredit government reform of healthcare for the next generation.

    1. discredit government reform of healthcare for the next generation.

      Make it so.

      1. Think about it. Suppose Our Lady of Election Fraud made an appareance this November and handed the Democrats back the majorities in Congress they had in 2009. Do you think there is any way in hell they would touch health care reform with a ten foot pole? I mean, they have their chance, go for full single payer, take Obamacare all the way!!

        No way in hell. Notice none of them are talking about reforming Obmacare or really saying anything about what to do. They are just pretending it doesn’t exist or saying “its to law and its too late to change”.

    2. Yep. It’s awesome.

  10. In 2015, well more than half of MNsure exchange subsidies won’t go to insurers on the exchange, but to a public program serving households that fall between the cut-off for Medicaid and 200% of the poverty level.

    If the insurers have to share their graft with the State, they won’t stay in the program. That’s . . . revealing.

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