This article isn’t the type of news MNsure and Mark Dayton wanted to hear:
Golden Valley-based PreferredOne Health Insurance just notified MNsure and the Minnesota Department of Commerce of their decision through a letter. Sources tell KSTP’s Tom Hauser that MNsure CEO Scott Leitz was notified by phone Tuesday morning.
PreferredOne Spokesman Steve Peterson tells Hauser this is “purely a business decision.” He says the company decided continuing to offer insurance through MNsure is “not administratively and financially sustainable going forward.”
“Our MNsure individual product membership is only a small percentage of the entire PreferredOne enrollment but is taking a significant amount of our resources to support administratively,” a company statement says. “We feel continuing on MNsure was not sustainable and believe this is an important step to best serve all PreferredOne members.”
That isn’t good news for MNsure. According to PreferredOne, MNsure is a bureaucratic nightmare. That’s what they meant when PreferredOne said that MNsure isn’t “administratively and financially sustainable going forward.” That’s a different way of saying they’d get soaked if they stayed in MNsure. Here’s their explanation why:
The company also says MNsure was unable to effectively verify information submitted by enrollees, but insurance companies are still required to accept and enroll them. As a result, the company ended up with enrollees who don’t even live in Minnesota in some cases.
A year after MNsure’s rollout, MNsure still can’t perform basic functions. MNsure can’t verify that people buying health insurance through Minnesota’s health insurance exchange are Minnesotans. This isn’t good news either:
As of Aug. 6, Preferred One had 59 percent of the individual market MNsure enrollees. Blue Cross Blue Shield was a distant second at 23 percent, with HealthPartners, Medica and UCare much further back. Preferred One got such a large share because they had the lowest rates of the five insurance companies in the program.
Companies don’t get 60% of a market by offering products at a little cheaper price. They get that high of a percentage of the market by offering a significantly cheaper price. That increases the likelihood that health insurance premiums will jump significantly when MNsure open enrollment starts.
That, in turn, has the potential to dramatically change the gubernatorial election landscape:
“One of the big land mines looking out over the campaign will be when MNsure announces its new rates for health insurance premiums,” University of Minnesota political expert Larry Jacobs said. “If those go up by 10 percent, some have even suggested 15 percent, then that could really shake up this election.”
This morning’s MNsure news has the potential to turn the Dayton-Johnson race upside down. This isn’t good news for the Dayton administration.