| (St. Paul) ... 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 reports
on their financial status. 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. The council and
its members are leaders in health care reform, practice guidelines
development, technology assessment and data collection and
analysis.
For information
about an individual health plan's numbers, contact:
Monika Strom
(651) 662-6889
Karl Oestreich
(651) 662-1502
Blue Plus
Eagan, MN
Cathy Nevanen
First Plan of Minnesota
Duluth, MN
(218) 529-9957
Chris Reese
HealthPartners
Bloomington, MN
(952) 883-5304
Larry Bussey
Medica
Minnetonka, MN
(952) 992-8013
Bonnie Hays
Metropolitan Health Plan
Minneapolis, MN
(612) 337-7160, office
Marcus Merz
PreferredOne
Golden Valley, MN
(763) 847-3201
Ruth Krystopolski
Sioux Valley Hospitals
and Health System
Sioux Falls, SD
(605) 328-6801
Debbie Weiner
UCare Minnesota
Minneapolis, MN
(612) 676-3562
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