Republican State Senator Sean Nienow has long been an outspoken opponent of the Affordable Care Act and its Minnesota health insurance exchange incarnation, MNSure. Nienow sits on MNSure’s Legislative Oversight Committee, and has been talking loudly about all the problems he finds with MNSure’s pending start-up next month.
Yesterday, Nienow popped off in response to a press release from Democratic State Representative Joe Atkins in which Atkins touted MNSure’s lowest in the nation rates:
But abt 20-50% higher than today RT @mlahammer: Rep Atkins counters showing #MNsure lowest premiums in US #mnleg @tpt http://t.co/iHrIxE0pky
— Sean Nienow (@SNienow) September 25, 2013
This prompted an interesting exchange between Nienow and StarTribune editorial writer Jill Burcum:
@SNienow What's your basis for the 20-50 percent higher?
— jburcum (@jburcum) September 25, 2013
@jburcum Just ballpark avg vs current market rates. To be fair ACA has new mandates which incrs costs, but still more $$ for premium payers
— Sean Nienow (@SNienow) September 25, 2013
@SNienow Sorry to belabor, but what data are you using for current market rates? Not what I've found on initial data dive.
— jburcum (@jburcum) September 25, 2013
@jburcum anecdotal research. It's a little tough, since the "real" MNsure rates aren't actually available yet.
— Sean Nienow (@SNienow) September 25, 2013
That, of course, was the “money tweet”. Nienow, one of the GOP’s point people on MNSure, didn’t know that the “real rates” had been released nearly three weeks ago. Way to be up to speed, Senator. The helpful folks over at MNSure helped him out, though.
@SNienow @jburcum real @MNsure rates have been available since Sept. 6 by @MNCommerce http://t.co/ixyLw6oVxt
— MNsure (@MNsure) September 25, 2013
Prompting Nienow to issue the “let me slink out of here while I still can” response:
@MNsure @jburcum Thx, I'll review later.
— Sean Nienow (@SNienow) September 25, 2013
Nienow’s process ignorance aside, what about his fundamental underlying point, though? Is insurance under MNSure way more expensive than what is available on the private market today? Well, let’s take one frequently cited data point and examine it a little more closely. (Let’s start off by acknowledging the caveats here — this is one example only that may or may not be representative of what others may experience.)
One of the rates that got everyone’s attention when the rates were released was the $90.59 lowest monthly premium for a 25-year-old Metro area non-smoker. This rate, and most of the other MNSure rates came in at least 20% below Congressional Budget Office estimates. The plan that produces that rate is the Preferred One Afford Select+ D (plan detailed starting on page 143 of this PDF file). Let’s compare this plan to an equivalent plan on the private market. To do so, I went to ehealthinsurance.com (an online marketplace that handles the same insurance companies that will be participating in MNSure) and found the closest comparable plan from Preferred One for a 25-year-old Metro area non-smoker.
Here’s the tale of the tape for the two policies:
|
Market Plan Preferred One for One |
MNSure Plan Preferred One Afford Select+ D |
|
| Monthly Premium | $86.30 | $90.59 |
| In-Network Deductible | $5,500 | $6,350 |
| In-Network Out of Pocket Maximum | $6,500 | $6,350 |
|
In-Network Charges Per Service After Deductible Has Been Met |
||
| Office Visit | $35 copay for first three visits; then patient pays 20% | $50 copay for first two visits |
| Generic Prescription (Retail) | $10 copay | $10 copay |
| Brand-Name Prescription (Retail) | Provider negotiated discount | $75 copay |
| Non-formulary Prescription | Not covered | Not covered |
| Emergency Room Visit | $300 copay first visit; then patient pays 20% | Fully covered |
| X-Ray | 20% | Fully covered |
| Surgery | 20% | Fully covered |
| Hospitalization | 20% | Fully covered |
| Labor and delivery hospitalization | Not covered | Fully covered |
| Mental health – outpatient | Not covered | $50 copay for first two visits |
| Mental health – inpatient | Not covered | Fully covered |
| Substance abuse – outpatient |
Not covered; additional rider at $2.59 per month available |
$50 copay for first two visits |
| Substance abuse – inpatient | Fully covered | |
Not much difference here. If we look at a “worst case scenario”, where one maxes out their in-network out-of-pocket maximum in addition to paying 12 months of premiums, one pays about $100 less under the MNSure plan ($7,437) than they do under the current market plan ($7,536). Before that $6,350 deductible point on the MNSure plan, the current market plan comes out slightly ahead, but by no more than $53 on an annual basis at any point between $0 and $6,350.
In this case, Nienow’s doom and gloom seems sorely misplaced. Especially given that young adults were supposed to be the ones “losing” from the implementation of the Affordable Care Act. If MNSure is producing comparable rates to the current market for young adults, then older and sicker Minnesotans are likely – on average — to do be doing much better. That’s an outcome to be lauded, not buried by self-serving and fact-free political rhetoric like Nienow’s.
If Republicans have actual evidence that MNSure rates are higher, then they should produce realistic side-by-side comparisons like the above to prove their point. Merely asserting it to be true ain’t good enough.
{ 12 comments… read them below or add one }
Seano is being polite. The 20-50% higher claim appears to be purely made up.
Sean,
Did your MN Sure example include both the participant’s premium payment and the tax benefit/credit? (ie What the tax payers are paying per participant)
The $90.59 is before subsidies.
What will the “total cost” that will be paid by the participant and us tax payers?
Currently it seems companies pay ~70% in the companies I work for. This is earned by the employees in compensation for their work. (ie part of their total comp, just like wages)
If tax payers like me are paying ~70% of the premium for these folks, what are they doing of value to earn the compensation? Or is it just welfare/wealth transfer? And why do the Democrats keep ignoring this very real cost?
Flying out of Shanghai soon. Limited computer time til tomorrow.
$90.59 is the cost of the policy.
Based on what’s on the MNSure site, individuals with incomes of about $23K and higher would pay the full price with no subsidy. Between $15K and $23K, individuals would be subsidized on a sliding scale via MinnesotaCare, paying between $23 and $50 per month themselves. Less than $15K, the individual would be on Medical Assistance and not pay anything.
By the way, excellent post… MPP’s are usually a bit more biased.
I am having a difficult time comparing a bronze plan to costs that I am familiar with…
Do you know who is paying for “the market place” and it’s support functions? Is that covered in the premiums or is that tax paw payer funded?
http://www.mnsure.com/hix/how-work/overview.jsp
That is one cost that is not present in the pre-obamacare system.
Start-up costs are being funded by taxpayers. Over the first few years, it’s supposed to be transitioning to a premium-based model (although the mechanics of which have not yet been finalized, as far as I know).
Technically to make a true comparison of rate differences, you would need to find some way to compare rates with and without Obamacare. It seems to me your comparison is just comparing 2 “post Obamacare” packages, which should be similar since they conform to the same “new rules”, especially if the Tax Payers are paying for the creation, maintenance of the “market place”. Thoughts?
http://www.mnsure.com/hix/calculators/f-and-i-cost.jsp
Also, based on the numbers it looks like the tax payers will be paying a fairly large amount of the premiums since a large amount of the population is in the “subsidized / tax breaks” category. (ie individuals under $45,960, family of 4 under $94,200) Back to my original question, what are these people doing to “earn” this compensation from the tax payers?
No, I’m comparing a policy from today (which only has certain parts of the mandates in) versus a future policy.
A 2009 income distribution chart I found.
http://give2attain.blogspot.com/2011/10/what-is-middle-class.html
My guess is 75% of households will get a subsidy or tax break. Which I assume will need to be paid for by the other 25%… (ie wealth transfer)
I’ve heard they are expecting about half of the people on the exchanges will receive subsidies, but I can’t find the link to that.