One undeniable — and, for many stakeholders and policymakers, frustrating — aspect of the American healthcare industry is the vast differences that exist between insurance markets from state to state. For decades, Minnesota has been one of the best examples of a market that bucks national trends. UnitedHealth Group helps illustrate the point: The carrier is the nation’s largest health insurer, but only fifth-largest in Minnesota despite being the largest public company headquartered there.
Against this backdrop, a number of recent and looming developments are nullifying many of Minnesota’s quirks and will soon disrupt market share in a major way.
For decades, state law limited the ability of out-of-state and for-profit insurers to operate in Minnesota, leading to a market dominated by regional nonprofits. Lawmakers recently lifted those limitations, and for-profit insurers are moving in aggressively, especially the aforementioned UnitedHealth Group, which is posting strong off-exchange commercial enrollment growth in Minnesota despite overall declines statewide.
UnitedHealth Group also has announced its intention to start selling Medicare Advantage plans in Minnesota beginning with the 2019 plan year. That decision is driven in part by another unique feature of the Minnesota health insurance market: the very high prevalence of managed Medicare, particularly Medicare Cost plans, which are scarcely purchased nationwide (where another managed model, Medicare Advantage, dominates) but quite popular in Minnesota. The federal government plans to discontinue Medicare Cost plans after 2018, which will force about three-quarters of Minnesota’s managed Medicare beneficiaries to switch coverage.
Finally, Minnesota long has boasted one of the lowest uninsured rates in the nation. While still below the national average, the uninsured rate spiked two percentage points in 2017, which is particularly odd and concerning in the face of Minnesota’s economic growth and declining unemployment.
The rise in the uninsured rate appears mostly attributable to substantial declines in the availability of employer-sponsored coverage. When that is combined with UnitedHealth Group’s aggressive expansion into its home state, the regional nonprofit health plans that have long dominated market share face a rocky road ahead.
For additional insights and detailed statistics on health insurance markets in Minnesota and other states, check out Health Plan Analysis.
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