2018 individual rates: What you need to knowJuly 31, 2017
The Five Ws and One H
The complexity of health care not only makes it difficult to keep up with the headlines, but it makes it tough to figure out what it means to you and your family. Rate request filings for 2018 premiums related to products available in the Minnesota individual health insurance market are now public, and here is what you need to know:
What does this mean?
Each year, we communicate details of proposed individual and small group premium rates for public review, consistent with state and federal law and regulation. It’s important to note that the requested rate increases are averages and do not represent member-specific pricing. Also, the rates won’t be final until they are reviewed and approved by the Minnesota Department of Commerce.
Blue Cross filed two sets of rate requests for Blue Plus individual and family plans. The first reflects an average 21.2 percent price increase over 2017 individual market rates, effective January 1, 2018. The second is significantly smaller at 2.5 percent but it is dependent on the federal government approving the state’s reinsurance program to help offset individual market rate increases.
Who does this affect?
If you are under the age of 65 and purchase your plan directly from your insurance carrier or through an agent or broker or on MNsure, you have an individual or family plan and the proposed average rate increases will apply to your health plan.
If you have Medicare, Medicaid or receive Blue Cross coverage through you or your spouse’s employer, these rate changes do not apply to those plans.
Why are there two sets of rates?
The State of Minnesota’s reinsurance program, which is waiting for federal approval, could dramatically lessen these proposed premium increases if approved. However, because the reinsurance program must be approved by the federal government before the program can take effect, 2018 proposed rates must reflect the full costs of the market before any offset from reinsurance. Reinsurance funds help health insurance carriers offset unusually expensive claims and keeps premiums more stable by helping manage the cost of care.
Why the potential for such a large increase?
While this year’s rate request isn’t as big as years past, we understand that any increase at all has a significant impact on our members. The decision to request a rate increase is based on several factors but the short answer is that the projected cost of care in the individual market is greater than the amount we currently collect in premiums.
How did we get to 21.2 percent?
While this year’s rate request isn’t as big as years past, we understand that any increase at all has a significant impact on our members. The decision to request a rate increase is based on several factors, but the short answer is that the projected cost of care in the individual market is greater than the amount we currently collect in premiums.
How are premiums determined?
Premium rates must be justified with actuarial data and require approval by the Commerce Department. There are two primary factors that drive rates: the cost of the products and services being provided and how much those products and services are used by members.
When will I know my rates?
The final and approved new pricing for Blue Plus plans in 2018 will be mailed later this year, prior to the start of open enrollment in November.
Where can I learn more?
Our rate filings will be accessible on mn.gov/commerce. Consumers can view the available supporting information for proposed 2018 rates. All proposed rates need to be reviewed and approved by the Minnesota Department of Commerce before going into effect.
The Blue Cross Blue Shield of Minnesota blog is a great resource too, find it at blog.bluecrossmn.com. You might like to read The Future of Health Reform: The Individual Market and Future of Health Reform: What’s needed next.