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Published December 12, 2013, 09:33 PM

Many people already covered by health insurance find better options on MNsure

The main reason for establishing health insurance exchanges such as MNsure is to provide coverage to people who lack insurance and need assistance paying for it.

By: Catharine Richert, MRP News 90.3 FM, INFORUM

The main reason for establishing health insurance exchanges such as MNsure is to provide coverage to people who lack insurance and need assistance paying for it.

But initial numbers from the state’s new online marketplace suggest that the site is attracting attention from people outside its target audience.

Almost two-thirds of the nearly 49,000 people who have completed insurance applications through MNsure will not receive financial assistance. That’s because they don’t qualify for federal subsidies or didn’t bother to find out if they qualify for assistance.

Many of those applicants have yet to make a final commitment and pay for a plan. Nevertheless, the numbers surprise state Department of Human Services Commissioner Lucinda Jesson, who also sits on MNsure’s board.

“We thought the large, large majority of those who are part of the individual market today would be people who came because they qualify for subsidies,” Jesson said. “But we are also starting to see a lot of people come through who either didn’t ask for or didn’t qualify for tax credits who see it as a good place to get coverage.”

Jesson said there’s an obvious reason people are shopping on the site: MNsure boasts some of the lowest premiums in the nation. Plans must include a minimum level of coverage and deductibles can’t exceed $6,350 for an individual or $12,700 for a family.

Among those who found a better deal on MNsure, even though she doesn’t qualify for a federal subsidy, is Paula Fleming, a freelance editor in Minneapolis. She and her husband have paid $500 a month for a family plan with a $10,000 deductible.

Fleming said their current policy doesn’t cover much.

“The only way to have premiums that were affordable was to get coverage that would keep us from losing the house if something really terrible, terrible happened, but otherwise was of no value,” she said.

Fleming and her husband found a plan on MNsure that will cost them $50 more a month, but has more comprehensive coverage and comes with a $4,000 family deductible.

That surprised Fleming, who was initially concerned about the Affordable Care Act’s exchange model.

“There was nothing in [the law] that said they couldn’t charge us an arm and a leg,” she said. “I thought we were going to be between a rock and a hard place. As it turns out, the competition, at least this year, is working. It’s fantastic. It’s tailor made for self-employed people like us.”

People who buy coverage for their dependents through their employer’s plan also may be able to find cheaper insurance on the exchanges, said Larry Levitt, senior vice president at the Kaiser Family Foundation. As health care costs have risen, some employers have been making employees pay a growing share of the cost of family coverage.

Take a separate provision in the Affordable Care Act that allows parents to keep their children on their plans until they are 26.

“That insurance doesn’t come free. It often requires a significant contribution by the family,” Levitt said. “So even though these young adults who have been able to get insurance on their parents’ policy, they may be able to find a better deal by buying through the exchange.”

The high level of interest from people not seeking subsidies is playing out in other states as well, Levitt said. In part, that’s because the process of applying for subsidies may be so difficult that people don’t bother.