ST. PAUL, Minn., April 1 /PRNewswire/ -- While total enrollment in
Minnesota's health plans remains steady, employers are moving away from state-
regulated HMO products to more flexible health care coverage. The shift is
evident in reports filed today with state regulators by Minnesota's health
plans where enrollment in HMO health care products decreased 10.6 percent
between 2003 and 2004 to 1.1 million.
Enrollment in small group products (2 to 50 employees) dropped 2.3 percent
to 247,961 while large group is down 22.6 percent to 372,876. In 2004, 12.3
percent of the state's population was enrolled in commercial fully insured HMO
products.
"The shift is not a surprise. We've cautioned about the erosion of this
segment of the market and watched employers move to other coverage over the
past few years," said Julie Brunner, executive director of the Minnesota
Council of Health Plans. "Employers are looking for every possible way to save
on health care costs, and the state's design requirements for fully insured
HMO products make it difficult to meet employer's needs for flexible,
affordable coverage."
Brunner added that this trend is evident in other states as well. A report
released last week shows enrollment in Wisconsin HMOs has decreased for the
third straight year as employers in that state seek other health benefit
options.
In Minnesota, coverage available through insurance products allows
employers more alternatives for enrollee cost sharing and tiered copayment
structures. Some employers are also choosing to self-fund their medical care
expenses in order to eliminate state health care premium taxes and assessments
from their costs.
In 2004, employers and individuals purchasing HMO products paid
$98.6 million in premium taxes and assessments, a 51 percent increase over
2003. These taxes include:
-- $21.5 million in Medicaid surcharges on HMOs that goes to the state's
General Fund
-- $35.2 million in premium taxes to help fund MinnesotaCare
-- $41.7 million assessment to support the Minnesota Comprehensive Health
Association (MCHA), the program for people who are unable to purchase
coverage in the individual market.
"Minnesotans enrolled in state-regulated products shoulder a
disproportionate burden for funding these important programs. Because more
than 40 percent of Minnesotans receive their health care coverage through
employers who self-fund, federal law exempts them from having to contribute to
these safety net programs," Brunner stated.
In addition to taxes, decisions by policy makers each year to more heavily
regulate this portion of the market adds to confusion and complexity to the
health care system. Minnesota ranks first in the nation in the number of
health care mandates according to the Council for Affordable Health Insurance.
Brunner said while intuitively it seems that the 62 mandates would apply to
all Minnesotans, in reality they do not because of federal laws.
Several proposals before the Minnesota Legislature illustrate the pressure
on employers in the fully insured market and the desire to reduce premiums,
Brunner said. Proposals include eliminating benefit mandates for some
coverage, creating a pool of all school employees in the state and allowing
small businesses to enroll their employees in MinnesotaCare.
"These proposals are filled with good intentions. Yet they do more harm
than good because they attempt to save money by segmenting healthy people away
from sick people, or place artificial caps on coverage," Brunner said.
"Dividing up the system hurts everyone in the end."
Other trends in the annual filings include:
-- The industry's operating margin remained steady at 1.8 percent of
revenue.
-- Enrollment in Medicaid and General Assistance Medical Care increased 5
percent to 274,902.
-- Enrollment in MinnesotaCare dropped 5 percent to 132,634.
"In light of the state's recent report on the increase in Minnesotans who
are uninsured, we all need to work together toward creating a health care
system that is truly a system where we provide the right incentives for
employers to offer coverage while ensuring a government safety net that can be
sustained," Brunner concluded.
State statute requires Minnesota's health plans to submit yearly report.
The reports are independently audited to comply with generally accepted
accounting principles, standards of the Financial Accounting Standards Board,
and definitions and standards promulgated by the National Association of
Insurance Commissioners and the State of Minnesota.
Established in 1985, the Minnesota Council of Health Plans is a trade
association of eight licensed nonprofit health plans. Council members have
pioneered a style of health care that has improved quality and consumer
satisfaction and expanded access to health care for all Minnesotans.
FOR INFORMATION ABOUT AN INDIVIDUAL HEALTH PLAN'S NUMBERS, CONTACT:
Monika Strom Karl Oestreich Bonnie Hays
Blue Plus Blue Plus Metropolitan Health Plan
651-662-6889 651-662-1502 612-337-7160
Cathy Nevanen Marcus Merz
First Plan of Minnesota PreferredOne
218-529-9957 763-847-3201
Chris Reese Ruth Krystopolski
HealthPartners Sioux Valley Health Plan
952-883-5304 605-328-6801
Larry Bussey Wendy Wicks
Medica UCare Minnesota
952-992-8013 612-676-3567
For more information:
Eileen M. Smith
651-645-0099 x11 (office)
612-840-4554 (cell)
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SOURCE Minnesota Council of Health Plans
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CONTACT:
Eileen M. Smith of Minnesota Council of
Health Plans, +1-651-645-0099 x11 (office), +1-612-840-4554
(cell)
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