Physician Patient

A Cost Benefits Analysis for the MNsure Insurance Exchange?

MPPA Colleagues,
What should be the parameters of a MNsure cost-benefits analysis?
Your comments?
MNsure Tax Increases by 133%


MNsure is Minnesota’s State health care insurance exchange which qualifies as the MN portal to federal subsidies based on income to buy health care insurance under the 2010 Affordable Care Act (ACA). To fund MNsure, the Minnesota legislature imposed a gross premium tax on all health care plans sold through the State MNsure exchange. That tax, which is hidden to consumers, is paid by Minnesota health plans which, in turn, pass on these increased costs of doing business to health care consumers, even those outside of the MNsure- brokered plans.



Throughout the committee process and passage of the MNsure bill in the Minnesota legislature last year, Minnesotans were told that the MNsure funding tax would stay around 1.5-2% of premiums charged and not jump to 3.5%, which is the rate for funding the federal exchanges (Minnesota chose to run its own exchange, i. e. MNsure). Minnesotans were also promised that MNsure plan premiums would result in an average annual savings of $500 for families.


How is this working out?



This week the MNsure board of directors unanimously voted to raise the gross premium tax in 2015 by 133%, from 1.5% to 3.5% This tax increase will result in higher HC insurance premiums for Minnesotans with either employer-based or individual coverage.



How many people are newly insured as a result of the ACA? A new report by the McKinsey Center for U.S. Health Care Reform indicates that 74% of ACA (Obamacare) enrollees were already insured. MNsure is not able to say how many enrollees have obtained health care insurance for the first time, because MNsure does not track that information. Yet, most MNsure enrollees have signed up for State medical assistance (MA, Medicaid) which is administered by Minnesota HMO plans. We do not know how many new MNsure Medicaid enrollees were already eligible for Minnesota MA coverage and were not enrolled before passage of the ACA in 2010.




Lee H. Beecher, MD
President, Minnesota Physician-Patient Alliance (MPPA)
6600 Excelsior Boulevard, Suite 121
Saint Louis Park, MN 55426-4746
“Empowering patients to make informed health care decisions”

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