Dive Brief:
- Two major insurers--Blue Cross Blue Shield and Health Partners--have pulled 5,000 policies from MNsure, the Minnesota health exchange. Another 6,500 policies may be pulled next year, according to exchange data.
- Due to a unique health insurance law in Minnesota, those customers' policies will automatically renew even though their plans are now off the exchange, unless the customers opt to return to the exchange to select a new plan.
- The strategy puts MNsure at a disadvantage because it then loses out on the 3.5% fee it collects on exchange policies, which comes to hundreds of thousands of dollars throughout the year.
Dive Insight:
The maneuver is legal and insurers say the aim is to offer better policies that match demand in the individual market. However, it puts MNsure at financial risk and forces the exchange to try to lure its own customers back.
It also complicates matters for customers, who may not understand accepting automatic renewal off the exchange means they will no longer receive tax credits.
State legislators are looking at solutions for the issue, reports the Star Tribune. Solutions in other states include taxing all plans in the individual market as opposed to just those sold on the exchange, and allowing exchanges to move customers to similar new policies if their old one is pulled off the market.