Health insurance premium spikes dramatically boost subsidies
MNsure officials said more than 57 percent of Minnesotans buying a health plan for next year through the state marketplace have qualified for tax credits that cover a portion of premiums.
The average tax credit will be more than triple this year's average.
"The average tax credit this year is over $600 a month," said MNsure CEO Allison O'Toole. "That is more than $7,600 a year in savings and those tax credits act like instant discounts off premium and really the only way Minnesota can right now save on their health insurance."
The jump in subsidies follows huge increases in the cost of insurance sold to individuals and families. Average price increases range from 50 percent to 67 percent, depending on the insurer.
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"For many of our customers, we're seeing that the amount of their tax credit is significantly or completely offsetting the amount of their premium increase," O'Toole said.
The tax credits are available only for people who buy individual and family plans through the MNsure exchange. O'Toole says about 100,000 eligible Minnesotans passed up subsidies this year because they didn't buy their insurance on MNsure.
The price hikes follow industry financial losses reaching hundreds of millions of dollars on individual and family plans. The red ink persuaded the state's largest health insurer, Blue Cross Blue Shield of Minnesota, to quit the individual market in 2017.
State commerce commissioner Mike Rothman has said allowing the remaining insurers to raise their rates dramatically was the only way to prevent a stampede out of the market.
Governor Dayton has proposed devoting some $313 million to buy down premiums for Minnesotans whose income is too high to qualify for federal subsidies. The rebate program would reduce premiums for those Minnesotans by 25 percent. Compared to this year's rates, the average premium increase would moderate from 55 percent to 16 percent.
That idea has yet to get traction with Republicans who will control both chambers of the legislature next year.
Meanwhile, there is much uncertainty about the fate of state exchanges like MNsure with Republicans who have vowed to repeal and replace the Affordable Care Act taking control of the White House in addition to Congress.