Category: Health Care
Posted: 09/17/14 14:43
by Dave Mindeman(Forgive me if this gets a little lengthy, but I wanted to cover it all
I guess the GOP thinks that the latest news about Preferred One pulling out of MNSure is worth a whole bunch of media time. So I guess I hate to disappoint them when I say the Preferred One pullout is no big deal.
I will try to explain this and I will speak slowly for all you conservative bloggers on the True North site.
Let's evaluate this based on facts...(we all remember those I hope) and along the way, let me point out the myriad of GOP criticisms that have never panned out.
First, these are the current total enrollments in MNSure - 327,154
I think we should remember that the GOP was blasting those numbers at the beginning, believing we would never meet projections. But we did.
Second, of those enrollments we have 54,646 that are qualified health plans or individual sign ups. That is what we are talking about here. And the GOP had a somewhat valid point that this part of the roll out was somewhat low. Since the site is paid for by a percentage of premiums in this group, there was a lot of criticism that MNSure would have to tap into general funds. That, again, did not happen.
Now of these 54,000 QHP's, Preferred One, (and this is important - a new entry into this type of insurance), got over 50% of the signups. The actual number is somewhere between 29,000 and 33,000.
This is my favorite quote from Jeff Johnson...."This is yet another example of everyday, middle-class Minnesotans paying the price for Mark Dayton's incompetence. Six out of 10 people who've purchased insurance through MNsure will now have to go through the nightmare process of purchasing another plan all over again--thanks to Mark Dayton
That is a terribly misleading statement. Six out of Ten sounds like a huge issue, but let's have a reality check. This is affecting about 30,000 Minnesotans which is 1 out of 10 people on the exchange. And if you think that punching in your data into MNSure and selecting another option is a nightmare than you must be depending on having some very placid dreams. And lastly, I would like to know how Mark Dayton has anything at all to do with it. Preferred One made a business decision (which I will go into more shortly) and they did not confer with Dayton - as far as I know.
OK, so let's discuss Preferred One.
Preferred One has never gone big into the individual health insurance
market.....For years, PreferredOne has been a small player in Minnesota for individuals who purchase coverage without help from an employer. The company had just 2 percent of the $688 million market in 2012 -- a sliver that was dwarfed by the 65 percent share held by Eagan-based Blue Cross and Blue Shield of Minnesota.
If you are going to venture into this type of market you would have to go big because adding a few new individual clients is bad for the pool. So, they decided to low ball the price and grab a big share. It worked. But still an addition of 30,000 to a small individual market pool put them at risk.
But their entry did a couple of things. It made the Minnesota market look like the best priced deal in the country. Preferred One's pricing was very attractive, but, in hindsight, wasn't realistic long term.
Personally, I think that Preferred One wanted a big presence to avail themselves of the new small business mandate. That is where their expertise lies and if these businesses went to the exchange, they would match up well. However, the small business portion was delayed by President Obama, which put more pressure on Preferred One's decision.
Here's another relevant fact....In the individual market, PreferredOne sells only in Minnesota.
Preferred One doesn't have a national presence. So these 30,000 individual plans is all they have from the exchanges. So, if they are losing money on them, it is probably a good business decision to pull out now before too much is invested.
OK, so now we know the basis and why the decision was made. I guess if you are the GOP and you are invested in a MNSure failure then this is the kind of thing you need to seize upon and distort. And they are.
But how is this really going to play out. Well, when you have an open exchange, there will always be players coming and going. Preferred One gambled and lost on their pricing scheme, but the more experienced individual market players are still there and they, of course, will pick up the slack - being available when these 30,000 people reapply.
There will be some unhappy people in those 30,000....their rates will probably increase somewhat but as I understand it, their networks will almost surely broaden to include more physicians and clinics. It isn't like these things don't happen with regular employer based insurance. Your employer is constantly shopping around and change plans often. Before I retired I used to have health care changes at least 2 out of every 3 years.
So, Minnesota will probably not be the lowest in the nation for premiums anymore, but double digit increases????....I doubt it. The market will take a few years to stabilize and then hopefully, prices will too.
Last year we had the "woe is me" mantra of 140,000 Minnesotans not being able to keep their health care. Well, they still got health care...not the same plans, but probably better plans with better coverage. The prices were more reflective of a real market, so they probably cost more, but they didn't go back to these high deductible policies in which you paid a small premium but never filed a claim. Paying the insurance company a stipend to have your name on a contract.
Preferred One is a reputable company. A good insurance company and the policies they sold were excellent. But they gambled on the price and lost. You conservatives should be familiar with that - free market capitalism and that sort of thing.
Really, this system was molded by Republican insistence. Had to have a market based system. No public option to fall back on. Subsidies based on a complicated evaluation system. That's your mark on a lot of it.
You can criticize this all you want. (and you are) You can even try to label Mark Dayton incompetent regarding it. (and you have). And you can put MNSure in there as the culprit (and again, you have). But the truth of the matter is that this was a business decision pure and simple. Frankly there are no bad players in this. This is just how business works sometimes.
You GOPers remember business don't you?